What are Your Rights and Responsibilities During an Audit? | FBC, Canada's Farm & Small Business Tax Specialist

What are Your Rights and Responsibilities During an Audit?

What are Your Rights and Responsibilities During an Audit?

What do you have to do when you've been audited - and what rights do you retain throughout the process?

That's the question we'll be helping to answer today.

Once you receive a notice that indicates that you'll be audited, you need to prepare the documents requested by the CRA auditor.

One of the easiest ways of doing so is by employing the help of a company who provides audit representation.

Even if you choose that route, however, you'd do well to know of the various rights and responsibilities you maintain throughout an audit from the CRA - we've listed a few of each just below.

Right: The Right To Privacy And Confidentiality

First off: you needn't worry about information regarding your audit getting into the wrong hands.

One of the rights you maintain throughout the process is your privacy, and your business' confidentiality - you never have to worry about the results found by the CRA getting to either your peers or your employees.

The CRA will be going through your documents, but during an audit, you maintain the right to your privacy throughout the entire process.

Responsibility: To Meet Registration, Reporting, Filing And Payment Obligations

You do have a responsibility, however, to ensure that you've been keeping up with all the tax obligations facing your business.

Regardless of your payments made or not made, the CRA will be investigating whether or not you've filed all your tax documents across past years - so even if you've kept up with your payments, you need to make sure all your reporting, registration and filing obligations are up to-date, too. 

Right: The Right To Be Treated Professionally And Fairly

If you think you're going to be interrogated - or worse yet, treated like a potential criminal - you can disregard that concern.

The CRA has made it totally clear that all those being audited will have the right to be treated like a colleague, rather than as a subject of investigation - the representative for CRA auditing you will be sure to treat you and your employees with the utmost respect throughout the entire process. 

Responsibility: To Keep Your Books And Records Both Up-To-Date And Acceptable

You should already know this one: as a business owner, it's your responsibility to maintain all records regarding your businesses expenses and taxes for at least 7 years.

The CRA is within its rights to request any information that regards your business during this 7 year timeframe, so don't let your business get caught off guard.

Luckily, audit representation can help you to ascertain whether or not you have all the needed documents well before the audit itself is scheduled to take place. 

Right: The Right To Accurate, Clear And Timely Information

Here's another right you and your business will maintain throughout an audit: you will never have to wonder where you stand with the CRA.

CRA promises to keep all business owners whose organizations are being audited in the know, as it were - you retain the right to "accurate, clear and timely information."

As soon as the CRA reaches a decision regarding your case, you and your audit representation support will be made aware of it. 

Responsibility: To Provide Your Books And Records On Request

Finally, this responsibility should go without saying: whenever the CRA requests a specific record or part of your company's books, you need to provide it.

Tax and accounting services firms can help you to organize those documents, but this remains the most important responsibility that your business has during an audit: you need to have every potentially-required piece of information on hand and ready to go. 

Being audited? FBC Can Negotiate with CRA on Your Behalf

"Wealth after all is a relative thing since he that has little and wants less is richer than he that has much and wants more." — Charles Caleb Colton