Tax Season is Finally Over Or Is It?
Well you finally feel like you can breathe a sigh of relief. You got your taxes completed and mailed in just before the deadline. Now you have a few months to not have to worry about this obligation and can get on with other business at hand. Within a few weeks you should receive your assessment, only to discover shortly after that you have received more correspondence from the CRA and you hate the thought of opening it, what could it possibly be?
Request for information:
Both personal tax payers and businesses receive requests for information from the CRA on occasion. It could be that something was missing from your tax return that is needed to complete it properly. Or as a business you may be asked to provide additional supportive information on an expense that you made. There is no need to panic, as all you have to do is be sure that you get this information required to the CRA. It doesn’t mean that you are in some kind of trouble it just may mean that clarification is needed. Also, check the tax year date that pertains to the request. The CRA can go back to reassess three years from the original assessment, or sometimes four years for huge corporations.
Now you may feel that once you have complied that this is the end of the matter, however if the tax department is not satisfied with what you have supplied they will continue with a further request and this situation could get to a point where the CRA wants to do an audit of your books and records.
Usually in these situations the matter is dealt with between the CRA and the tax payer, but if necessary the government will contact third parties if they need additional information from them that pertains to the issue you are being audited over, or if they find something else during the audit that doesn’t sit right with them.
You may not agree with the requests that the CRA are making, but to keep yourself out of some serious trouble like non compliance you are much better off to cooperate and utilize any necessary expertise that may help you understand what the issues are. A Toronto accountant can assist you with guiding you as to what the CRA is asking for and checking that you are sending the correct information as required. You may even authorize your accountant to speak to the CRA on your behalf if you do not understand what the potential problems are.