How Can You Survive A CRA Audit for Foreign Tax Credits

Today, more and more individuals and businesses face CRA audits. Canada Revenue Agency (CRA) has ramped up audits of foreign tax credits for both individuals and small-to-medium sized businesses. If you are singled out, you can get prepared by getting information of how CRA selects foreign taxpayers for audits and knowing what to expect during the audit. Here are a few tips to help you survive a CRA audit.

Avoid Getting a CRA Audit

Most foreign taxpayers are simply chosen randomly for a tax audit. Other people are targeted because of things that they give or omit on their tax returns. You can always work with a cross border tax accountant to help you avoid getting a CRA tax audit in the first place.

Keep Detailed and Accurate Records

One of the best ways of surviving an audit is to have detailed and precise records. Good bookkeeping habits will also help the auditors to do their work and will get them away from you sooner. Ensure that you keep copies of all your personal investment, bank, credit card, and RRSP statements for you and the family, including the business records. This will help to speed up matters and will be less expensive if the CRA requests for them during the treaty tax return audit.

Hire a Tax Professional

When you get a notification from the CRA regarding the upcoming audit, be sure to hire a tax accountant. This will ensure that you have qualified representation during the entire audit process. Furthermore, you will have a tax expert who has your best interest at heart.

Tax review processes are done randomly among foreign taxpayers. Therefore, having this check does not mean that there are errors on the tax return or you are being suspected of anything. Furthermore, if you do not agree with the CRA assessment, you can always appeal their ruling. Ensure that you put these tips in mind as a taxpayer eligible for cross border tax.