Whether your heart recently skipped a beat as you were contacted for a CRA audit or you’re currently scratching your head after receiving your final assessment, many people don’t know what to do next.
This guide will walk you through responding to the CRA about audit requests and to dispute a claim.
How To Respond To A CRA Audit Notification
- Don’t ignore the request. Contact your CPA immediately and share the correspondence.
- Have your CPA respond promptly to the tax authorities, including answering requests and providing information.
- Be organized.
- Provide only the information requested. Period.
- Carefully review any assessed penalties for errors. The CRA can make math errors too.
- Never give the CRA the only copy or the original of a document.
Can My Accountant Represent Me If I’m Audited?
Yes. In fact, CPAs or tax attorneys are your best options for representation. In most cases, an experienced CPA can be enough for your audit.
CPAs may:
- Communicate with the CRA on behalf of a taxpayer
- Represent a taxpayer at conferences, hearings, or meetings
- Prepare, file, or submit documents
- Provide clients with written tax advice on one or more federal tax matters.
Most importantly, CPAs have experience with many cases, experience dealing with the CRA, and in-depth knowledge of tax law and financial planning. With their help, you’ll reach the best conclusion legally and monetarily.
Should you represent yourself in a CRA audit?
You’re allowed to, but you’re probably not the best person to do it. You wouldn’t represent yourself in court, would you? Perhaps you’re worried because hiring a CPA sounds expensive.
Certified Public Accountants are also pretty low on the tier of people you want to defend you. They are trained in tax planning and examining financial statements, and they can handle a tax audit, but they can’t handle tax collection matters like foreclosure and lien proceedings. Quite simply, they don’t have the training. They can be very useful in preparing your case for the CRA, but don’t ask them to represent you at higher levels like an appeal or tax court.
In addition, not all CPAs are even qualified to represent you at an audit. They’re only permitted to do so if they have qualified as an Enrolled Agent (EA), a taxpayer representative who has “demonstrated technical competence in the field of taxation” and received a right to practice from the U.S. government.
A tax attorney is the “gold standard” of representation (if you find the right one, of course). They can and do use input from EAs and CPAs in preparing their case, but they are qualified to handle complex tax collection matters independently. Offers in compromise, audits, payment agreements, and potential criminal matters – the tax attorney can represent you no matter what your concern is.
Contact us for a free consultation where you’ll pick a qualified tax attorney you’d like for assistance.
Can I Fight A Claim From A CRA Audit?
If you think the CRA misinterpreted the facts or applied the law incorrectly, you have the right to object to:
- income tax assessments, reassessments and determinations indicating taxes or amounts owed
- determinations or redeterminations such as
- the goods and services tax / harmonized sales tax (GST/HST) credit,
- the Canada Child Benefit (CCB)
- the disability tax credit (DTC)
- the CRA’s decision on your objection or your CPP/EI
However, there’s a long list of things you aren’t allowed to object to. Start with the Canadian government’s objection filing page in order to explore your options. If you see a viable angle, file an appeal to the Court.
