Three Things Making CRA Audits Tougher?

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Gateway Tax Services

• My name is Andrew Adolph and I am a Certified
  Professional Accountant (CPA).
• I was hired straight out of accounting school in
  1990 by Revenue Canada who were looking for
  people to be auditors of the new goods and
  services tax (GST) the government was proposing.
  Luckily for me, the GST was successfully enacted
  on Jan. 1, 1991.

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Three Things Making CRA Audits Tougher?

• Some disturbing trends have been noticed in the
  way CRA audits are carried out. CRA seems to have
  been squeezing more out of its audits. So, the
  audits are taking more time and the CRAs Appeals
  Division is overburdened.

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Longer Audit Periods

• CRA can audit a tax return any time in three
  years once it is assessed. GST returns files in
  two recent fiscal years and any return file in
  the current year can be assessed. In 1997, a
  directive was issued regarding how long a normal
  audit period should be.

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Net Worth Audit

• CRA uses net worth audit as a tool to discover
  the increase in a taxpayers wealth and
  unreported income over the audit period. In this
  audit method, the CRA tax auditor compares the
  assets and liabilities at the beginning of the
  selected audit period with the assets and
  liabilities at the end of the audit period. The
  auditor also checks the expenditures in this
  period. This helps the auditor to get the closing
  net-worth and find unreported income.
• An important thing to learn here is, CRA is not
  bound by the information given by a taxpayer. The
  tax auditor is allowed to make reasonable
  assumptions that are supportable by the available
  evidence.

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Automatic Gross Negligence Penalty

• The CRA Tax auditor has the authority to levy an
  additional penalty if they notice an error and
  they feel that error was made deliberately.
  Twenty-five percent of the GST misstatement
  amount is calculated as GNP.

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• If you receive a notice from CRA regarding the
  GST audit of your company, contact us. We are
  specialized in GST audits and can help you deal
  with this difficult situation efficiently.

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Contact Us

• Gateway Tax Services
• 13383 108 Ave,
• Surrey, British Columbia, V3T5T6
• Office 604.240.6173
• Mail Id info_at_gatewaytax.ca
• Email Id https//gatewaytax.ca