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A Canada Revenue Agency (CRA) audit of your small business costs money, takes up your time, and causes a whole lot of stress. Is it possible to avoid a CRA audit? There are no guarantees, but here are some tips that may help keep you off the CRA's radar screen.
1. Be aware that there are different types of audits - "An audit is a review of your business' books and records by the CRA to ensure that your tax return accurately reflects the taxes owed by the business and to ensure the business is meeting all of its filing and payment obligations," says Chartered Accountant Chris Bodnar, a partner with Crawford, Smith & Swallow LLP in Niagara Falls. "The CRA may perform an income tax audit, a Harmonized Sales Tax (HST) audit and an employer compliance audit, which includes Canada Pension Plan, Employment Insurance, tax withholding and taxable benefit reporting." The CRA may audit records at its offices or...