The Canadian income tax system is basically based on self-assessment. In simpler words, it is up to every Canadian taxpayer to completely and properly report their total income from all sources on their annual T1 or T2 income tax return.
The Canada Revenue Agency performs tax audits and different issues related to income tax assessments in order to ensure that the self-assessment income tax system maintains to work properly.
While most Canadians are honest on their tax returns, there are some who are not. CRA is looking for errors or controversial positions or deliberate errors on tax returns that have been filed.You can browse http://www.highburytaxsolutions.com/ to know more about the tax consultant.
What is an income tax audit?
An income tax audit is an examination of a taxpayer's returns and supporting records to make sure that income and responsibilities have been properly reported and are supported by accounting records and receipts.
The CRA tax auditor will ask to see the person and records and bank account and receipts for charges. A corporation will normally have to give time to support any profits or bonuses.
There may be applications to be filled out. Any information that is incorrect, even if due to an error, will be used against the taxpayer.
Most audits are done to ensure agreement with the income tax act for income or payroll deductions.You can also navigate to this website in order to get help from tax auditor.
Canadian tax audit process
CRA auditors will often search for appropriate information on the Internet, and a taxpayer's website or other sources located on Google might differ information the taxpayer provides to the auditor.
This information will then be utilized for further inquiries possibly including third party requests for information. Furthermore, open social media accounts are publicly accessible, and Canada revenue agency auditors will gather this information from taxpayer social media accounts to make a case against a taxpayer.