Understanding the CRA Audit Process: How to Stay Compliant and Avoid Red Flags
Overclaiming deductions? Unreported income? These are just some red flags that can trigger a CRA audit. The Canada Revenue Agency (CRA) is responsible for ensuring taxpayers comply with Canadian tax laws. While most individuals file their taxes without issue, some may be selected for an audit. Understanding the CRA audit process can help you remain compliant and avoid common red flags that trigger an audit. What is a CRA Audit? A CRA audit is an examination of an individual’s or business’s financial records to ensure that tax obligations have been met accurately. The CRA conducts audits to detect errors, discrepancies, or fraudulent activities related to tax filings . While audits can be stressful, proper preparation and compliance with Canadian tax and accounting services can simplify the process. Why Does the CRA Conduct Audits? The CRA conducts audits to ensure the integrity of Canada’s tax system. Audits help identify misreported income, unclaimed deductions, or...