# Is CRA Reassessment/Audit Targetting on Indivudual or the Whole Family?



## IloveCanada (Jan 25, 2016)

Dear Everyone:

Got a question here. It may sound a little weird, but hope to get some ideas. 

In Canada, both husband and wife file tax return and each gets his/her assessment. Now if CRA finds some issues in one person's return, let's just say in the husband's, and decides to reassess or audit, will it be done just to this individual (e.g., the husband)? Or the whole family (e.g., both husband and wife will be reassessed or audited) ?

Thanks in advanced.


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## AlMansur (Jan 25, 2016)

*CRA Reassessment*

Normally CRA reassessments will be done individually, not the whole family.
However, if there are direct links to the family, say a partnership business, then all the partners will be reviewed/audited.

There's not enough info to provide a precise response.

Hope that helps.


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## OhGreatGuru (May 24, 2009)

Or if they are questioning transfers of credits between spouses, they might look at both.


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## Just a Guy (Mar 27, 2012)

It depends, they can look at anything they want. If you are self-employed, they could look at either you or your company, but they could also look at both as well as your spouse and any children listed as "owners" (assuming they're of age). They could also choose to audit multiple years. 

Basically they can do as much or as little as they want.


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## gibor365 (Apr 1, 2011)

CRA is ridiculous and "they can look at anything they want.", but usually they target individual...


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## IloveCanada (Jan 25, 2016)

AlMansur said:


> Normally CRA reassessments will be done individually, not the whole family.
> However, if there are direct links to the family, say a partnership business, then all the partners will be reviewed/audited.
> 
> There's not enough info to provide a precise response.
> ...


Thanks AlMansur and everyone who responded. The information is very helpful. The reason I am asking this is as following.

My wife is a housemaker and therefore her tax return is very simple and straight (no self-employment, no ownership, or anything). The thing is that she needs her tax assessment by the end of March in order to renew her permanent resident card (this appears to be a requirement added in recent years). On the other hand, my tax filing will be a lot more complicated and therefore, I want to make sure she will not be affected if there is indeed some issues on my return.

I would like to ask another question if I may. Do couples have to file tax on the same day (or very close to each other)? If not, maybe my wife can file the return first, like right now and I will take my time to do it before the deadline.

Again, thanks in advance for all suggestions.

Have a nice night.


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## Just a Guy (Mar 27, 2012)

You can file your taxes separately. In fact, if you don't owe taxes, technically you don't even have to file your taxes on time.

Of course, if you're late, you probably get into their radar faster.

Most people file at the same time because it's usually easier to do both at the same time, especially when you need to calculate things which are joint (child tax credits, income splitting, joint income, etc.) but that is out of convenience, not necessity. 

That being said, if you do things properly, getting audited isn't necessarily a bad thing. They don't always find something wrong, in fact a lot of people come out of audits just fine.


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## Eclectic12 (Oct 20, 2010)

IloveCanada said:


> ... In Canada, both husband and wife file tax return and each gets his/her assessment. Now if CRA finds some issues in one person's return, let's just say in the husband's, and decides to reassess or audit, will it be done just to this individual (e.g., the husband)? Or the whole family (e.g., both husband and wife will be reassessed or audited) ?


Depends on what triggered the reassessment/audit ... if it is clearly specific to the individual with nothing to suggest there is something that would affect both, it will involve the one. If it is something that both could benefit from or are involved in - then likely a decision will be made.

For example, if one spouse puts in their T4 income as $23K instead of $32K where everything else is correct - then it will be the one spouse. If one spouse is identified as participating in a charitable donation tax scam, CRA may decide to request verification (I am assuming the returns were Netfiled where one has to keep the receipt) or audit the other spouse.


Cheers


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## newuser (Sep 16, 2014)

CRA requests for records are not purely individual. My wife and her colleagues all got asked to produce records once.

I would go with the assumption that a human auditor is involved and will target any other links that triggered the suspicion in the first place.


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## IloveCanada (Jan 25, 2016)

*381*



Just a Guy said:


> You can file your taxes separately. In fact, if you don't owe taxes, technically you don't even have to file your taxes on time.
> 
> Of course, if you're late, you probably get into their radar faster.
> 
> ...


Thanks again, JustaGuy, for your information and it is very helpful. I think I am going to have my wife file first as soon as Netfile is open. Keep my finger crossed that she can get her assessment on time, which is what really matters to me.

Have a nice day.


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## IloveCanada (Jan 25, 2016)

Eclectic12 said:


> Depends on what triggered the reassessment/audit ... if it is clearly specific to the individual with nothing to suggest there is something that would affect both, it will involve the one. If it is something that both could benefit from or are involved in - then likely a decision will be made.
> 
> For example, if one spouse puts in their T4 income as $23K instead of $32K where everything else is correct - then it will be the one spouse. If one spouse is identified as participating in a charitable donation tax scam, CRA may decide to request verification (I am assuming the returns were Netfiled where one has to keep the receipt) or audit the other spouse.
> 
> ...


Thank you very much, Eclectic, for your valuable information. Wish you have a nice day.


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## IloveCanada (Jan 25, 2016)

newuser said:


> CRA requests for records are not purely individual. My wife and her colleagues all got asked to produce records once.
> 
> I would go with the assumption that a human auditor is involved and will target any other links that triggered the suspicion in the first place.



Thanks, Newuser, and I really appreciate it. 

Now, according to your response, I assume your wife and her colleagues had to produce records because CRA found something in another individual's filing, right? If so, may I ask that at that occasion, was your wife's or her colleagues' assessments being on-hold (or delayed) until after the audit? 

As mentioned, the real concern for me is that my wife needs to get her assessment on time for her application. If she gets it, and later on has to explain something or present some records because of my filing, that is not my biggest concern for now.

Looking forward to hearing from you again and have a nice day.


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## Just a Guy (Mar 27, 2012)

There are a number of different "levels" of CRA asking for information. The most basic level is for them to ask for documentation. You make claims, let's say you claim the child fitness credit. CRA may ask you to prove that you payed for the sports. This is to keep people honest, and it's usually done randomly. 

CRA may do a more involved mini-audit, also randomly selected people, which goes through your records a bit more.

You can also be randomly selected for a full audit (fairly rare). 

It seems, if you run your own business, you will probably get audited (everyone I know who has a business has been audited it seems). I had this happen to me, they looked at my company, my returns and my wife's for two full years. In the end, everything was fine,,they didn't need to make any adjustments. Most of the other businesses I know had minor changes which resulted in them having to pay between $50-$2500. 

Then, of course, are those people who get involved in something shady...like those tax evasion schemes where you "donate" to some charity and get 100x your donation as a tax credit. These types of schemes may fly for a few years, so the people pushing it say it "works". Of course, CRA can come back at any time (you're not even safe after 7 years like many think) and come after you. These are the audits you need to worry about, but if you don't do anything illegal most audits aren't that bad.


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## fraser (May 15, 2010)

CRA have audited /reviewed my returns several times over the years. My spouse has NEVER been audited/reviewed.

But we are not in any way associated through a business, etc.


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## IloveCanada (Jan 25, 2016)

Just a Guy said:


> There are a number of different "levels" of CRA asking for information. The most basic level is for them to ask for documentation. You make claims, let's say you claim the child fitness credit. CRA may ask you to prove that you payed for the sports. This is to keep people honest, and it's usually done randomly.
> 
> CRA may do a more involved mini-audit, also randomly selected people, which goes through your records a bit more.
> 
> ...



Thanks again, Just a Guy, for all your information. Right now, I will stick with the plan to file my wife's return first next month as soon as the Netfile is open. Hopefully, I can bring some happy news to share with everyone who responded to my question in a month or two.

Wish you have a lovely night.


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## IloveCanada (Jan 25, 2016)

fraser said:


> CRA have audited /reviewed my returns several times over the years. My spouse has NEVER been audited/reviewed.
> 
> But we are not in any way associated through a business, etc.



Thanks Fraser, and I hope it will be the case for my wife this time. Have a nice night.


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## Just a Guy (Mar 27, 2012)

Perhaps we shouldn't mention that CRA can choose to audit you at any time and go back as far as they want. Just because nothing happens this year doesn't mean you're off the hook. Generally, I believe most audits are made on taxes that are more than a year old. Hey do the "quickie" audits in the year of filing, but the major ones they seem to decide to go after much later, well after tax season. 

I can't remember exactly but I believe my audit was about two years after the years they actually looked at.


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