Tax filing season becomes stressful for everyone. Once you file your tax returns, you breathe easy and feel relaxed. But sometimes the relaxation doesn’t last for long when you receive a notice of a tax audit from the Canada Revenue Agency (CRA). Often business owners go into panic mode as an audit is not anything anyone would want to go through. But a CRA audit is not something to be scared of as it is just a simple process that includes some basic procedures that tax accountants in Edmonton can handle with relative ease.
Three Types of CRA Audits
Tax audits conducted by the CRA are generally of three main types. These audit types include:
Audits In-Office
When you receive an audit notice, you will be informed about the type of audit. In an in-office tax audit, you will be asked to visit the local CRA office. This type of audit is conducted by the CRA when they want you to be present to justify your tax documents in detail. When you are called for an in-office audit, make sure you carry all the tax filing documents along with you.
Audits by Mail
Audits of local and small businesses are a minor task for the CRA and hence a majority of them are conducted through the mail. In a mail audit, you receive a notice about the audit along with a list of documents needed by the CRA to justify the returns filed by you. You can simply mail the documents needed by the CRA and the matter can get resolved.
Field Audits
Field audits take place at your business premises. In such an audit, you first receive a notice and then a CRA officer visits your premises for a detailed investigation of your financial documents. Such audits generally take place for businesses that have too many suspicious transactions.
What Happens After an Audit is Completed?
After the audit process is completed, the next step that takes place is the place where the CRA gives a decision based on your documents. This decision-making process includes:
1. Validation
After the CRA scrutinizes your tax returns, the agency verifies that your documents are complete and as per the regulations. Once your documents are verified, you need to sign the report and the returns can be filed.
2. Alteration
If there are certain details that were missing initially in your report, the CRA will ask you to make the necessary changes and alterations in your returns and file them.
3. Application
If in case the CRA found a major discrepancy but you do not agree with the CRA, you can file an appeal for reconsideration.
Though an official audit is a process initiated on discrepancy suspicions, it is not necessary that there will be major issues to worry about. Sometimes an audit can also take place for minor mistakes. So next time you get an audit notice, do not worry and simply take the assistance of trusted tax accountants at ATS Accounting and Tax Edmonton.
ATS Accounting and Tax Edmonton has experienced tax advisors who will help you with your business’s tax planning, filing, and tax audits. Our team of dedicated experts knows the specific risks you may face and help ensure your business is protected.
Ready to get started? For more information about our accounting and tax services, book your free 15-minute consultation by calling us at 780-484-4006 or contacting us online.
