If you are a business owner, one of the things you have to worry about is the Canada Revenue Agency (CRA). The CRA can review your tax returns at any time, and if they find something wrong, they can audit your business. In this article, we will discuss what happens when the CRA reviews and audits your tax returns. We will also discuss how you can prepare for a review or an audit by the CRA.
What is the CRA Looking For?
When the CRA reviews your tax return, they are looking to see if you have reported all of your income and expenses correctly. The CRA will also look at your accounting records to make sure that everything matches up with your tax return. If the CRA finds something that is not correct, they will send you a notice telling you what needs to be corrected. You will then have to fix the problem and resubmit your tax return.
What Does the CRA Do When They Select Your Tax Returns for Review/Audit?
If the CRA decides to audit your business, they will look at your accounting records in more detail. They may also ask for additional documentation, such as receipts or invoices. The audit can take several months to complete. And you may have to pay penalties if the CRA finds that you owe them money.
How Can You Prepare for a CRA Review or Audit?
There are a few things you can do to prepare for a CRA review or audit. First, make sure that you keep good records of all your income and expenses. This will make it easier for you to prove that you have reported everything correctly to the CRA. Second, if you are selected for an audit, don’t panic! If you have done nothing wrong, there is nothing to worry about. Just cooperate with the CRA and provide them with the documentation they need.
If you are selected for a CRA review or audit, the best thing to do is cooperate with the agency and provide them with any documentation they need. If you have kept good records and reported everything correctly, you should have nothing to worry about. However, if the CRA does find something wrong, you may have to pay penalties. If you have any questions about the CRA or your tax return, it is best to speak with an accounting or tax professional.
How Can GTA Accounting Help?
We can help you prepare for a CRA review or audit at our accounting firm. We will review your accounting records and make sure that everything is in order. And we can also help you gather the documentation the CRA will need if they decide to audit your business.
We can also help you prepare and file your tax returns on time and accurately. We understand the tax laws and regulations, and we can help you take advantage of all the deductions and credits you are entitled to. Contact us today to see how we can help you with your accounting and tax needs!
Sohail Afzal, CPA, CMA, MBA
Sohail Afzal, (CPA, CMA, MBA) is the founder & CEO of GTA Accounting Professional Corporation. He is a highly experienced Chartered Professional Accountant and businessman himself and understands the challenges that many businesses face when it comes to cash flow management. As an experienced business consultant & tax advisor, he is helping companies grow by providing the technical, financial, and contractual information necessary for strategic decision-making.