Canada Revenue routinely reviews the tax returns filed by Canadians. This is due to the Canadian tax system being based on an honour system of self-assessments without requiring Canadians to provide documentation for their numbers. In order to maintain the system’s integrity and to help keep everything honest and running smoothly, Canada Revenue periodically reviews individuals. Here’s what you need to know.
Working with Canada Revenue. A tax review is the not the same thing as a tax audit, but you’ll still need to be prompt and effective in your communication with Canada Revenue. They may request documentation, and you’ll need to provide any and all documents in a timely manner. Since there is a time restraint on reviews, it’s vital that you respond quickly with the information they’ve requested or by contacting them directly.
Maintaining Your Records. One of the challenges with any review or audit is locating the documents Canada Revenue has requested. They may ask for any number of documents including receipts, expenses, deductions, tax credits and more. Any document used within the six years previous to you filing your taxes is fair game, so it’s important to keep documents at least that long and keep them meticulously well organized, so they may be found easily and quickly.
Protecting Yourself Against Fraud. Phishing schemes in Canada are on the rise. Frequently phishers will prey on the trust Canadians have for their government and impersonate a Canada Revenue worker, so it’s important to be alert for suspicious activity. If your tax return is being reviewed, you will receive a letter on official letterhead, not an email. Alternatively, Canada Revenue may call you directly. In this case, you may choose to hang up and call Canada Revenue yourself to confirm the review. Remember that Canada Revenue will always be respectful and professional with their review. Any requests for e-transfers, prepaid cards, or personal information are a red flag. Similarly, if an individual claiming to be from the Canada Revenue speaks aggressively or threatens you, that is a sign they may not be who they say they are.
Many affluent Canadian families living at home or abroad pay excessive amounts of tax to Canada Revenue. We provide these ultra high-net-worth Canadians with the professional experience and knowledge necessary to significantly reduce or defer this sum. Our comprehensive tax plans account for both domestic and international issues, and we’re available to help should you find your tax return has been chosen for review. Contact our professionals today to begin safeguarding your wealth against unnecessary taxation.