Every year CRA conducts reviews and audits to sample and educate tax payers on tax compliance, and 2016 will be no different.
CRA estimates that approximately 30,000 letters will be sent out across Canada this year. These letters will give you information about certain claims you have made on one or more of your recent income tax and benefit returns. The information in the letter is requesting you to evaluate if you comply with Canada’s tax laws and will give you the opportunity to request an adjustment if you find that items were incorrectly claimed in any of the past tax returns filed. The receipt of one of these letters does not imply that you will be subject to an audit although it may sound like that.
CRA states that the purpose of these letters is to help individuals and small business owners better understand their tax obligations, which they hope will increase future voluntary compliance, protect the government’s tax base, and utilize resources within the CRA more effectively.
If you are a business owner or an individual tax payer who has had consecutive business or rental losses or an employee who has employment expense on your personal tax return, you might be getting one of these letters.
The letters have already started coming and if you receive one, please give us a call and we can provide you with assistance.
If you would like more information or have any questions, feel free to contact us at 780.466.6204, or click here to send us an email.
Thanks to Richard Ouellette of KWB Chartered Accountants for providing this content.