Four Tips To Prepare For A Complete Tax Audit
An unannounced audit by the Canada Revenue Agency (CRA) is the last thing that a business owner wants to confront. But, if you were notified that your business is going to be audited, you need to be prepared to deal with this situation. The first thing to decide is whether you will be handling the audit process on your own or taking help from professionals. Most organizations have an in-house tax professional to help out during CRA audits. The knowledge of certain tax laws can also be useful in answering the questions your CRA auditor might ask. An attorney from a good Edmonton law firm will be able to educate you on the relevant tax laws and help you navigate the tax audit with ease.
Today, we will discuss a few tips that help you prepare for a complete tax audit:
- Prepare all the necessary documents and records
Any audit conducted by the CRA involves auditors checking your financial documents that were used to file taxes. This includes your cheques, receipts, bank statements, electronic and online records, invoices, books of accounts, and your tax calculations. Therefore, you need to update all the necessary documents before the auditors request for it. If your records are incomplete, then there is a high chance that your auditor will ask you to refile them. This implies that the audit might take longer than usual.
- Stay organized
Business owners also need to understand that the tax audit team will assess their organization based on their tax records and their credibility. Anything in your office that urges them to suspect you should be avoided. Most auditors are accountants and like things neat and tidy. Hence, an auditor will tend to doubt someone who is not systematic and dumps everything in their datasheets carelessly. It is therefore, recommended that you keep everything organized in your office.
- Prepare yourself to defend your claims on tax benefits
If you have made any tax benefit claims, then you should be prepared to justify them in front of the CRA agent. You should consult your corporate lawyer to help you with the research regarding the tax laws and come up with a legal document that supports your tax benefit claim. Taking help from a lawyer who specializes in tax laws optimizes your claims significantly.
- Hire an attorney from an Edmonton law firm
For a hassle-free audit process, it is recommended to hire an attorney from a reputed Edmonton law firm prior to the notice. Dealing with the CRA can be a stressful process. You do not need to go through it on your own. A corporate lawyer is well-versed with the all the legal information to help you in the auditing process.
You can get in touch with our legal representatives at Prowse Chowne LLP to consult with a business lawyer today.