Well the day has finally arrived when you open that little brown envelope and find that CRA wants to review your books and records. What do you do?
- DON’T PANIC Take a deep breath and count to ten. In Canada our tax system is self-reporting. This simply means that you do your own thing and report to the government. Most audits are simply a case of the CRA making sure it’s been done it right.
- RE-READ the letter. They will tell you when and where they want to do the audit. If the timing is really bad for you it can be adjusted. Simply call them to make other arrangements, their contact information will be in the letter.
- GATHER ALL THE DOCUMENTS they require. The letter will list what it is they want to see. Often you may need to contact your lawyer or accountant to get such things as Articles of Incorporation or working papers. Don’t delay this step. It sometimes takes longer than you anticipate to remember who has your minute book or other required information.
- CALL YOUR PROFESSIONAL You’re always best to have your bookkeeping professional handle the audit for you. Clients of GAIN CONTROL know to call us immediately. We’ll contact CRA and handle it all for you. We know how much to say or not say, which can cause an audit to go deeper than first planned or expected. In the case where the auditor takes a position that may not be correct in your specific circumstance, we can argue on your behalf. This actually happens quite often. The auditor only sees the physical documentation you provide and doesn’t always know the story behind it.