Navigate Canadian Audit & Tax Reviews with Confidence | Canada Tax Reviews
If you receive a letter for a tax review from the CRA, don’t panic. It’s not an audit. But navigating it can sometimes be stressful, and you don’t have to go alone. AIV Chartered Professional Accountants stands by your side as your trusted Canadian guide and support throughout the entire process.
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About AIV: Your Canadian Ally for CRA Tax Review, Audits, And Taxation
AIV is a leading Canadian accounting firm specializing in tax services, with a dedicated team of experienced professionals who understand the complexities of the Canadian tax system and the CRA review and audit process.
We bring a personalized approach, clear communication, and a commitment to achieving your best possible outcome.
Common Reasons Why The CRA Might Select Your Tax Return for Review
1. Discrepancies with third-party information:
The CRA compares the information you provide on your return with what they receive from other sources like employers (T4 slips) and financial institutions. Any inconsistencies, such as missing income or mismatched amounts, can trigger a review.
2. Unusually High Claims:
The CRA may scrutinize your return if you claim deductions or credits that are considerably higher than expected for your income level and circumstances. This can include claims for various expenses, such as medical, office, home, or charitable donations.
3. Business losses:
Consistently reporting losses from your business year after year might prompt the CRA to investigate further, especially if there’s no clear explanation for the continuous losses.
4. Missing or information:
Incomplete or unclear information on your return can make it difficult for the CRA to process it accurately and may lead them to request additional details or clarification.
5. Non-compliance history: If you do not file your returns on time or have outstanding tax debts, the CRA is more likely to scrutinize your future returns.
6. Complex tax situations:
If your tax situation involves complex elements like foreign income, self-employment, or involvement in tax shelters, your return might be chosen for review to ensure everything is reported and calculated correctly.
7. Verification of Information:
Reviews are often conducted to validate the information provided on the tax return, even though much supporting documentation isn’t initially required. The CRA might request documentation up to six years old during this process.
8. Random Selection: The CRA may also randomly select returns for review.
9. Scoring System: The CRA uses an undisclosed scoring system to identify returns with a high likelihood of inaccurate information.
10. Income Splitting: Tax returns where taxable income is split between spouses are more likely to be reviewed.
11. Cash-intensive Businesses: The CRA more frequently reviews returns from individuals working in cash-intensive industries like restaurants or home improvement due to the potential for unreported income.
Remember, a review is not the same as an audit. It’s generally less formal and involves the CRA requesting additional information or clarification from you.
However, it is still important to take it seriously and respond promptly and accurately to their inquiries.
If you need clarification on any aspect of filing your tax return, it’s always best to consult with us. We will guide you through the filing process and help minimize your chances of triggering a review.
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Types of CRA Reviews Program
If the CRA reviews your income tax, don’t panic. It’s a normal procedure to ensure your return is proper and correct. However, we highly recommend you pay attention to it.
Here are some types of reviews the CRA conducts:
This occurs before the CRA issues your notice of assessment and typically involves verifying specific information on your return.
Unlike the pre-assessment review program, this program conducts reviews after the notice of assessment has been issued.
This program conducts reviews either before or after issuing a notice of assessment to ensure accurate refunds according to the Income Tax Act.
The program conducts reviews before or after issuing a notice of assessment. It proactively identifies high-risk accounts and potential identity theft victims and validates CRA system data.
Our program conducts reviews prior to issuing reassessment notices, ensuring allowable and well-supported return change requests. Trust us for a thorough assessment.
This program conducts reviews both before and after issuing a notice of assessment. Special assessments delve deeper into tax returns to identify non-compliance risks. Information requests go directly to taxpayers or authorized representatives.
This program reviews income, losses, and deductions in detail, either before or after a reassessment notice has been issued.
This program conducts reviews after issuing the notice of assessment. It compares your return with data from third-party sources like employers or financial institutions.
How Can AIV Help You With Audit And Canada Tax Reviews?
The AIV team, with its extensive expertise in managing audits and tax reviews across Canada, provides a reassuring presence in your financial management. Our financial experts are adept at guiding you through audit requirements, crafting strategic compliance plans, conducting audits, or scrutinizing your financial statements to ensure accuracy and prevent misstatements.
Moreover, we’re equipped to bolster your financial safeguards by developing and enhancing internal fraud prevention and detection controls. We’re also here to aid in formulating policies and strategies that elevate your financial management practices.
Curious about how our audit and tax review services in Canada can benefit you? Reach out to us today. We’re not just eager to understand your unique challenges but to discuss tailored solutions that show we value your specific financial objectives.