More small and medium-sized companies are facing a CRA audit these days. The Canada Revenue Agency or CRA is scheduled to make follow-up audits to these businesses. Knowing how CRA chooses taxpayers for audit, and what to expect during the audit, can make you well prepared if you’re chosen for the audit. For this reason, you need a CRA audit protection to ensure that there is insurance to back you up, especially when you’re required to pay exuberant fines and penalties. So, here are useful tips to complying tax rules and regulations:
- Prevent CRA Audit in the First Place
Taxpayers are simply chosen at random for CRA audit. Others are questioned as they provide or don’t provide accurate information on their tax returns.
- Keep Accurate and Detailed Records
If you don’t want an audit done to your business, ensure your financial records are detailed and accurate. If you have good bookkeeping habits, you help the auditors do their job fast and get out of sight sooner. If you have a CRA audit protection, someone from the coverage can represent you on your behalf and they will respond to all queries that the CRA will ask.
- Ensure the Tax Professional Request Adequate Time for Preparations
You’ll need to ensure you have adequate time to gather all information needed for the audit. If you don’t have copies of bank and credit card statements, you’ll find it hard to get them from financial institutions. If you postpone the audit appointment, the auditors can be annoyed and can have a negative feedback about your company. You never want to suffer the consequence that follows their next action.
- Provide Information the CRA Auditors Asks For
Gather everything CRA will ask for. Respond to all questions honestly, and never try to be helpful by providing additional information. It can complicate your audit and the auditor may highlight those which he is not focused.
- Appeal to the CRA Assessment
Once the audit is done, CRA will require some tax adjustments that the office will send in 30 daysfor rebuttals. If you don’t agree with such assessment, you can always seek for an appeal.