Receiving a CRA audit notice is one of the most stressful things a business owner can face. The good news: you don’t have to navigate it alone, and professional representation from the start makes a significant difference.
Types of CRA Business Audits
HST/GST Audits
The CRA examines your GST/HST returns, ITC claims, and supporting documentation. Common triggers: large refund claims, revenue/HST inconsistencies, and cash-intensive industries.
Payroll Audits
Focus on worker classification (employee vs. contractor), source deduction calculations, and T4 accuracy. Misclassification makes the corporation liable for all unpaid CPP, EI, and income tax plus penalties.
Corporate Income Tax Audits
Can range from a desk review to a comprehensive examination. Common focus areas: shareholder loans and benefits, management fees, aggressive expense claims, and revenue recognition.
What to Do When You Receive a CRA Audit Letter
- Don’t respond immediately on your own — Contact a CPA first
- Understand what’s being asked — Audit letters are specific about periods and information under review
- Gather documentation systematically — Organized, complete responses invite fewer follow-up questions
- Respond within the timeframe — Ignoring requests escalates to arbitrary assessments
How CMP Accounting Can Help
- Review your books and identify exposures before responding
- Prepare documentation packages for the CRA
- Communicate directly with CRA auditors on your behalf
- Challenge proposed adjustments that are incorrect
- Assist with the objection process if needed
Facing an audit notice? Don’t wait. Contact CMP Accounting today.