What to do when the scary CRA calls you
The CRA and other government bodies are getting more aggressive in following up with people about their taxes. It’s often an intimidating process to you and many other business owners. The CRA can feel like a scary monster that could come and investigate you. You and others are sometimes afraid they’ll take up time and energy away from growing your business. Some get paralyzed and don’t even know how to respond.
We understand that it can be hard to know what to do. We have over 20 years of experience in dealing with the CRA and their auditors. We know how to handle their inquiries but understand that you may not feel so comfortable.
So what can you do?
One proactive step is to ensure your bookkeeping, taxes and accounting are correct and current. If you have doubts, make sure to work with a trusted, experienced advisor. At least if issues pop up, there will likely be fewer problems.
One option to consider is voluntary disclosure if you know you’re late, owe money or haven’t registered with the government. This only works if they haven’t contacted you first. In this case, you approach them first with your situation. Often, the government may waive penalties and interest. It would be best to use a third party to discuss with them on your behalf. For more information, go here. (make here a link to http://www.cra-arc.gc.ca/voluntarydisclosures/)
Know your rights. Canadian taxpayers have an ombudsman, an advocate. It’s role is to oversee the CRA’s operations and try to ensure all taxpayers are treated fairly. You can complain to their office if you feel you’ve been treated unfairly and they’ll investigate it. To learn more about your rights, visit the ombudsman website. (make website link to: http://www.oto-boc.gc.ca/menu-eng.html)
Keep a record of your conversations. The CRA can sometimes provide inconsistent instructions or advice. It’s a good idea to keep a record if one contradicts another. Every CRA auditor has an ID number and they’re required to provide it upon request. Request it and log when you speak to them, about what, and their contact information.
If they are performing an audit, request in writing a list of the information they need to perform it. This can often appear intimidating to ask for, but it should be done. This prevents them from doing fishing expeditions and limits them to look at only what they request in writing.
If you don’t know how to handle a request, talk to somebody who does with all the information you have. The types of requests the CRA asks for are fairly common. They don’t vary that much from one to the next. We or your accountant should know how to handle it and if not can enquire to find out more.
Remember that CRA auditors are just people. They’re not monsters. They dislike being ignored just as much as anybody else. Respond to them politely and in a timely fashion and you’ll have fewer problems. If you’re unsure how to do so, talk to an expert.
We’ve attached a little guide that you can keep handy in case an auditor ever calls you. If they do, then you can reference these helpful steps. That goes for the EHT, Ontario Ministry of Finance, WSIB or any other regulatory body calling you.
We don’t expect that this post will necessarily handle all your fears. If you have more questions or concerns, don’t hesitate to contact us or your accountant.
We can be reached at (416) 495-1098 or email us at firstname.lastname@example.org.