# CRA audit?



## jargey3000 (Jan 25, 2011)

has anyone here on CMF ever been audited by CRA for a personal ( not business) tax return? care to share details?


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## Eclectic12 (Oct 20, 2010)

Asked for additional documentation to support what was claimed ... asked to provide receipts ... asked to pay thousands in penalties/interest for a mistake CRA made ... asked to file something like five adjustments to five previous tax returns to explicitly confirm my choice to avoid paying thousands in penalties/interest that I didn't owe (in someone's world - paying bogus penalties/interest is what a tax payer might choose to do  ).


Never been formally audited though.


Cheers


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## AltaRed (Jun 8, 2009)

Formal CRA audits would be rare for a vanilla non-buisiness taxpayer who is mostly earning employment income or being a retiree. The following link provides some perspective. https://www.thebalancesmb.com/audit-of-your-canadian-business-294865 Also this one Tempted to cheat on your taxes and play the ‘audit lottery’? These two cases should dissuade you

Mostly, it is CRA asking for confirming documentation for expenses on a T1 return.


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## Eclectic12 (Oct 20, 2010)

Or in the case of my mother, asking for supporting documentation for her medical expenses for at least five years in a row. 

My sister was shaking her head as the numbers didn't vary that much so she didn't see the need for so many documentation requests. Sending in the documentation was the end of it so again, no formal audit.


BTW ... the first, small business link doesn't seem to work. 


Cheers


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## newfoundlander61 (Feb 6, 2011)

Yes I have audited 3 times and each time it was for charitable donations. I give anywhere from 14-18% of gross income to various organizations. Each time I followed CRA's request and mailed in all receipts and passed all 3 audits with no issues at all. Have not have an audit a few years since.


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## AltaRed (Jun 8, 2009)

newfoundlander61 said:


> Yes I have audited 3 times and each time it was for charitable donations. I give anywhere from 14-18% of gross income to various organizations. Each time I followed CRA's request and mailed in all receipts and passed all 3 audits with no issues at all. Have not have an audit a few years since.


Why call that an audit? That is simply a request for supporting documentation. That has happened to me a few times as well, as it should. You know an audit when you see one. It generally means CRA smells wrongdoing and you get a complete ream job and your family jewels kept in a short noose until every stone is turned over for X years of taxation.


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## kcowan (Jul 1, 2010)

Yes I have also been requested for additional details on medical claims. Every year I came up with more receipts than claimed. After three years of aggravation, they stopped.

I just claimed a total amount (15500) with no supporting detail. I have a spreadsheet ready to submit but all the detail is not yet scanned. I will submit it to a fax in Winnipeg if asked. I use one sheet per receipt to maximize the paper generated. I use Faxzero so it is all soft copy at my end.


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## Plugging Along (Jan 3, 2011)

I have been asked many times for supporting documentation. Usually when we have large fluctuations from the previous year in deduction category. It's been simple, send in the documents, and everything has gone through.

There was one year I was a part of an audit there was a very large sale and deduction that I was just one part of. Everyone in that transaction was audited where we had to submit a lot more documentation or proof. We thought that would happen as a family, so that year we had the same accountant prepare everything for our taxes for all the parties involved. The accountant took care of it but she also prepared all of our taxes that year. 

I have found if you have all your paper work and documents, the process is very simple.


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## kcowan (Jul 1, 2010)

The other thing to remember is that the CRA analysts get measured on yield per audit so they look bad when their inquiries are repeatedly deemed unnecessary .


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## gardner (Feb 13, 2014)

One bit of advice I have read is that you should be prepared with photocopies of _everything_ and be very careful to not let them take away -- or even handle, if avoidable -- any original document. There are horror stories of folks producing original documents for the auditor, only to have them go missing and wind up with no recourse.


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## Just a Guy (Mar 27, 2012)

I was fully audited both personal and corporate for two years. When I asked around, every small business owner I knew had been audited at least once. Most of them had something minor wrong, but none had to pay more than about $2500. As for me, they sat with my accountant for over a week going through everything and found nothing wrong. The auditor did say that I had a lot of assets that they’d get one day, but I’d done nothing wrong so far. Of course, I wound up paying almost 4K to my accountant because cra used their offices for over a week.

so it did cost me in the end.


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## kcowan (Jul 1, 2010)

Just a Guy said:


> I was fully audited both personal and corporate for two years. When I asked around, every small business owner I knew had been audited at least once. Most of them had something minor wrong, but none had to pay more than about $2500. As for me, they sat with my accountant for over a week going through everything and found nothing wrong. The auditor did say that I had a lot of assets that they’d get one day, but I’d done nothing wrong so far. Of course, I wound up paying almost 4K to my accountant because cra used their offices for over a week.
> 
> so it did cost me in the end.


Can you add the audit costs to your expenses the following year?


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## Just a Guy (Mar 27, 2012)

I’m pretty sure I did, but it was a long time ago. Accounting fees are usually a write off


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## james4beach (Nov 15, 2012)

jargey3000 said:


> has anyone here on CMF ever been audited by CRA for a personal ( not business) tax return? care to share details?


Not an "audit" but CRA wanted documents from me twice. But this is common... and it's not an audit.

One was when I had some moving expenses. I've heard from others that CRA frequently reviews this material. They wanted evidence to back up my moving expense claim, so I sent them photocopies of a mountain of receipts along with a trip itinerary which showed dates & places. They accepted the claim.

The more recent one was due to a foreign tax credit claim. I claimed a $52,000 foreign tax credit, nullifying all my taxes owing, but apparently CRA did not want to just take my word for it 

CRA sent me a polite letter asking for supporting documentation. I gathered 8 supporting documents and uploaded them to CRA's portal. It's a very nice online interface, actually. I also spoke with a CRA agent on the phone (a nice lady in the Maritimes) for some help along the way.

Within just 60 days of submitting my documents electronically, CRA sent me another polite letter saying they have allowed my 52K credit.

At least in my experience, the CRA is very easy to deal with and they have this great online interface for sending documents. I'm very pleased with the level of service, and the CRA has questioned very reasonable things about my returns.


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