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Anyone who receives a phone call or a letter from a CRA or QRA auditor will either draw a sharp breath or miss a heart beat. You don’t need to be dishonest to experience this anxious moment upon learning of an audit. Fiscal laws are complex, and no one can be a hundred percent sure of not having committed a potentially costly error.
Governments need the money they are owed, and will use any number of methods to collect income taxes or TPS & QST : request of information about rental, business, professional or employment activities, full fledge audit, arbitrary assessment, seizures.
A tax audit could end up being a life and death matter for your business. You then need good advice and support. Business of all sizes and individuals are counting on our services to protect their interest. We represent clients at every level and in every manner of tax dispute.
Before providing information to tax authorities, it will always be a good idea to consult a professional who can assess potential problems and advise you on a secure path to proceed.
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Support with an audit
Whatever the size of your business, a tax audit at your place is often a traumatizing experience. To have taxation experts at your side as soon as possible gives you leverage with auditors from CRA or QRA, and will prevent you from errors due to inexperience. Auditors are professional on their own and they know what they’re looking for and where to look. Taxpayers mostly are at a disadvantage facing these specialists. Our tax experts will provide you with much needed advice and can also take charge of the on-site audit.
The tax authorities’ risk-assessment system selects files to audit based on a number of conditions such as the potential for errors in tax returns or indications of non-compliance with tax obligations. They also look at the information it has on file and may compare it to similar files or information from other audits or investigations. The auditor has a supervisor and must meet performance criteria. The auditor cannot spend too much time on a non-productive file. Our team of experts will discuss issues raised with the auditor. Sometimes, a preconceived misconception by the auditor may lead to an unnecessary wild chase. An audit started on wrong assumptions may result in an unjustified assessment. Nobody likes to admit having made a mistake, in consequence it’s better to correct false impressions early. To collaborate with the auditor should also prevent out of the blues assessment.
Interfering with all contributors
Few tax payers possess the experience to discuss with tax auditors. We have the knowledge to help you. Our experts know how either CRA or QRA auditors should proceed. Over the years, we have established good working relations with a number of auditors, supervisors, team leaders and other representatives of the agencies. Our credibility enables us to negotiate settlements which may reduce otherwise costly litigation.
Disagreement with proposed reassessment
After the audit, you will be sent a proposal letter. If you disagree with the proposal, you are encouraged to contact the auditor to try and resolve factual disagreements. It is not too late to be represented by tax experts. It is important to promptly react at this stage, because you will generally have only 30 or 21 days to do so. Additional representations on your behalf can reduce taxes, interests and penalties. In certain cases, the assessment can be annulled. If needed, we can obtain additional delays to provide more information to the auditor.
Appeal after a reassessment
Of course, sometimes itis not possible to reach an agreement with the auditor. Facts can be disputed or interpretation of the applicable law may differ or both. At this stage, we can help in deciding if an appeal is indicated. Should that be the case, an appeals officer will revise the auditor’s work. More representations can be made to the appeals officer in order to reach a settlement or clarify misconceptions. An appeal has to be made within 90 days of the reassessment.
Appeal to the Tax Court of Canada or the Court of Québec
When representations to the appeals officers do not result in a satisfactory decision, the remaining option is to file an appeal with either the Tax Court of Canada or the Court of Québec. That doesn’t exclude the possibility to negotiate further during formal proceedings. We have experienced lawyers in tax litigation, and out of court settlements are often reached. The time limit to file an appeal at the appropriate court is rigid. In exceptional circumstances, appeals can be made out of the time limit specified in the law, but that will cause other expenses if not to lose rights if permission for a late appeal is not granted.
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