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What NOT to do When You Are Being Audited

02/12/2015


So the Canada Revenue Agency (CRA) has contacted you. You’ve been selected for an audit. If you’re first response is to go into stress mode, you’re not alone. Here are five helpful tips to consider NOT doing when you find out you are being audited:

  1. Don’t take it personal. While having to do an in-depth investigation into your finances can feel incredibly personal, the CRA does not have it out for you. They are simply doing their best to ensure tax compliance across the board.

  2. Don’t ignore phone calls or letters from the CRA. The CRA will not simply leave you alone because you choose to take a passive approach to their assessment. Ignoring your assessment or audit could also lead to legal action and hefty interest rates being accrued on top of your amount owing.

  3. Don’t be evasive with the CRA. Lack of transparency could be interpreted as a failure to comply with requested information. The more transparent and involved you are in the process will leave you feeling much more in control. Don’t be rude or disrespectful when speaking with the CRA. The golden rule applies here. If you want to be treated with respect, you must show respect in return.

  4. Don’t take an assessment as fact. You have the right to object an audit. The quality of the documentation and assistance you can provide will improve your chances of coming through it with a reduced tax bill.

  5. Don’t expect the process to be completed overnight. Be patient. Successfully completing the audit process takes time.

While an audit can leave you feeling vulnerable and the task of navigating through it can feel overwhelming, it’s important to remember however, that it is in no way personal. A fairly wide net is cast when selecting individuals or businesses for the audit process. While audits can create frustration and anxiety, it’s best to be as proactive and informed as possible so that you can get back to doing what you do best – which is running your business.