ARE YOU BEING AUDITED BY THE CRA ?
Don't fight with the CRA Alone !
If the CRA Contacts, you Call Us immediately !
Contact a CRA Audit Expert for free Risk Assessment
The Best CRA Audit Assistance from Ex-CRA Auditor
The CRA audit Can Cause Significant Financial Damages.
The Canada Revenue Agency (“CRA”) has the authority to conduct audits to ensure the taxpayers fulfilled their tax obligations. If the CRA selects to audit your business or personal tax returns, you will receive a letter describing the audit scope, the audit period, and the books and records that the Agency will need. The CRA would never explain the reason why they selected your business.
You should contact us immediately after CRA notifies you about the Tax Audit. It is crucial to receive CRA Audit Assistance from a tax professional at the beginning of the CRA Audit Process.
The CRA Audit is an unpleasant experience, and quite often, they cause significant tax liabilities, interest, and punitive penalties.
As an Ex-CRA Auditor, Boris Davidkov, CPA, CGA has the expertise and the technical knowledge to assist, protect, and fight for you during and after the tax audit.
It is essential to engage us as soon as possible. Failing to do that might result in unfavourable treatment and overstated tax reassessments, including substantial penalties, interest, and even prosecution for tax evasion.
CRA Net Worth Audit
The CRA can use the Net Worth Audit Technique on Every small business audit
During the CRA Audit, the auditor uses the Net Worth Method in instances where it suspects that the taxpayer received significantly more income than reported. The CRA calculates the net worth at the beginning of the audit period, takes personal and business expenditures into account, and then calculates net worth at the end of the period. The increase of the net worth plus the personal expenditures in that period is presumed to be income, compared to the reported income. The difference is the amount of unreported income is often is subject to a severe penalty of 50% of reassessed taxes.
Typical targets are those operating cash businesses that report low income or losses, who have not kept good records, and have a seemingly increased net worth and personal expenditures.
However, based on the CRA risk assessment, the CRA can choose to conduct a Net Worth Audit on any small businesses in Canada, including corporations, partnerships, and Sole Proprietors, especially the ones that operate in the so-called definition of “Underground Economy.”
It is tough to find expert assistance during the CRA Net Worth Audit. Only a Formal CRA Auditor with multiple years of experience could help you avoid penalties and significant tax liabilities.
Ex-CRA Auditor is here to help
There are many different types of tax audits that trouble the average small business. The most punitive, disturbing, and the most difficult to comprehend and challenge is the Net Worth Audit.
Only a tax professional with a profound understanding of the Net Worth Audit Technique could successfully resolve a Net Worth Audit Dispute.
During his career with the CRA, Boris Davidkov, CPA, has conducted multiple Net Worth Audits of many small businesses, including bars and restaurants, construction companies, general contractors, subcontractors and trades, builders, service providers, and cash businesses.
While working for the CRA, he used the Net Worth Audit Technique for almost ten years, making him one of Canada’s best Net Worth Audit Experts.
Ex-CRA Net Worth Auditor Provides the Best Assistance
How We fight the Net Worth Audits
We provide full representation and assistance during Net Worth Audits. When a client engages as for audit assistance or CRA Tax Help Consult, we conduct the following:
- We obtain and review the audit file and all supporting documents;
- We challenge the auditor’s decision to use the Net Worth Audit Technique versus other income verification methods;
- We review the Net Wort Quantitative analysis and supporting evidence;
- We identify gaps or omissions due to incomplete information used in the Net Worth analyses;
- We examine each asset, liability, and expenditure used in the CRA Net Worth Audit;
- We challenge the penalties proposed by the auditor and try to eliminate them;
We help during the Audit by challenging the CRA Net Worth Analysis. We fight for each asset, liability, and expenditure in the CRA quotative analysis.
How we Can help ?
Our Assistance during each stage of the CRA Audit
We have developed a plan of action to assist you at each stage (phase) of the CRA tax audit. The following are some of the activities we perform during our audit assistance engagement:
- We meet with you to review the circumstances;
- We explain to you what to expect from the CRA, and we inform you about your rights and obligation;
- We immediately take control of the communication with CRA;
- We obtain information from the auditor about the nature and the scope of the audit;
- We review the financial statements, tax returns, notices of assessments and reassessments,
- We prepare the books and records requested by the auditor;
- We recommend a strategy to deal with the audit.
- We represent you during the audit process;
- We make sure that the auditor’s actions are according to the CRA Audit manual and procedures;
- We make sure that the CRA Auditor honours your rights;
- We review the CRA Audit plan and make sure the auditor’s team leader approves all audit steps and techniques;
- We attend the meetings with the CRA auditor, and we reply to their questions;
- If needed, we provide assistance and office space to the CRA Auditor to inspect the books and records;
- We regularly inform you about the audit progress;
- We respond to queries and the CRA requests for information only if the tax law requires us;
- If we need additional time to provide the information, we request a reasonable extension from the CRA;
- We collect and review audit correspondence, as well as any other relevant documents from the Agency.
- When the audit is complete, the auditor sends a proposal letter, which explains the auditor’s findings and the audit adjustments;
- We review the proposal letter for weaknesses and recommends further actions;
- We obtain the audit file including correspondence, reports, memos, and working papers;
- We review the audit plan, reports, memos, and the working papers and identify the strengths and the weaknesses of the audit adjustments;
- If it is required, we obtain legal help to confirm our interpretation of the Тax Act.
- We prepare representation, and we submit it to the CRA Audit Division;
- We meet with the auditor and his team leader and try to settle the tax dispute.
There are situations when a business owner faces the CRA audit alone without a professional representation. In most of these cases, the CRA neglects taxpayers’ rights, and the audit becomes an exceptionally stressful experience. These audits could result in excessive tax liabilities, interest and penalties. If you missed the opportunity to engage us during the audit process and received a Notice of Reassessment, we can still help. We will prepare and file a Notice of Objections, together with the required submission, and we will represent you during the entire appeal process.
You have rights. Canada Revenue Agency Audit can be controlled.
We fight for Your rights
We protect the Taxpayer's Rights during the CRA audit.
Each small business should expect to pay no more and no less than the correct amount required under the tax law.
You have the right to disagree with the CRA decision on a tax or penalty matter and you are entitled to a formal review of your objection or an appeal.
The CRA must treat you courteously and with consideration at all times, including when they conduct audits. The CRA is required to listen to you, to explain their decisions, and inform you of your rights and obligations.
You have the right not to pay personal tax amounts in dispute until you have had an impartial review by the CRA Appeals and Objections Office or until that court has issued its decision.
Sometimes the best defense is the counter-attack. You have the right to file a complaint. The CRA is accountable for what they do.
You can choose any person to represent you and help you during CRA Audit and to file a Notice of Objections. However, you are still legally responsible for your tax and benefit affairs, even if you choose to have someone act for you. If you want the best results, you need to look for assistance from a tax professional.