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Of all the issues pertaining to Canadian taxes, few seem more daunting than a review or audit by the Canada Revenue Agency (CRA). Thankfully, when you file income tax returns with us, H&R Block has you covered. Our Audit Assistance service helps you with any correspondence received from the CRA at no additional charge. Here’s what you need to know about the CRA review proves when you file income tax each year.
The system for processing Canadian taxes is primarily based on self-assessment (i.e. the honor system). This means that individuals voluntarily file an income tax return to report their annual income and claim any deductions or credits that apply to their situation. In this way, you are able to calculate the amount owing or the refund you’ll receive. This is what our experienced tax return filing experts have been doing since 1964. We know the system inside and out.
Each year, the CRA conducts a number of review exercises to promote awareness of and compliance with the laws governing Canadian taxes. Review programs promote public education by identifying common areas of misunderstanding with a goal to improve the various guides and forms that the CRA provides. There are several reasons why a specific tax return filing may be chosen for review, including random selection, comparison of information on returns to that received from third-party sources, types of deductions or credits claimed, and an individual’s review history.
The process of selecting returns for review is the same whether an individual chooses to file income tax returns by mail or electronically. Most of the 25 million income tax returns filed each year are processed within two to six weeks. The CRA processes most Canadian taxes without conducting a manual review so that a Notice of Assessment and/or refund can be issued as quickly as possible. However, all returns are screened by the Agency’s computer system and may be subject to review at a later date.
As experienced tax professionals, we are well acquainted with all these processes and highly recommend you keep all receipts and documents to support your claims for at least six years in case you are selected for review. Most importantly, remember that if you file income tax and your return is selected for review, it does not reflect on you as the tax preparer.
About H&R Block Canada
H&R Block has been serving Canadians for more than 40 years. As the country’s leading group of professional tax advisors, we strive to help all our clients build a better financial future. From providing fast, reliable tax return filing, to offering dependable advice on Canadian taxes, we are committed to delivering tailored assistance and proven solutions. Contact us today to find out how we can help you.
Visit H&R Block’s Tax Talk for articles and advice on preparing Canadian taxes, as well as other related business and finance topics.