You receive a notice in the mail that you’ve been selected for an audit by the Canadian Revenue Agency. If you’re like many Canadians, your first reaction might be concern over why the CRA chose you and trepidation over what they might they might find by scrutinizing your records.

“It’s a common reaction for those receiving an audit letter to experience stress. It’s important to understand that there are many reasons why someone can be chosen for an audit and that adopting the right attitude and approach can reduce stress and make the process as efficient and pain free as possible.”

Brad_Sinclair_Millards_Brantford

Brad Sinclair, CPA, CA, Partner
Millards Chartered Professional Accountants

Brad Sinclair, CPA, CA and Partner at Millards Chartered Professional Accountants in Brantford has many years of experience assisting clients through CRA audits. This three part series of articles is an overview of the most important points you need to know about audits.

The first article discussed why audits are required and how tax returns are selected for a review. Part two outlined the audit process, your responsibilities to the CRA and some tips for navigating your investigation with minimal anxiety.

In this final of our three part series on surviving an audit, we’ll review the rights guaranteed to you by the Government of Canada.

“As a Canadian taxpayer, you have a number of rights when it comes to dealing with the CRA. These rights are outlined in the Taxpayer Bill of Rights – 16 rights that apply to all taxpayers and registrants.”

The Taxpayer Bill of Rights is a set of statutory and administrative rights, introduced in 2007, outlining the service standards that Canadian taxpayers can expect in their dealings with the CRA. These rights are meant to protect a Canadian citizen from unprofessional or unjust treatment by the CRA. While these are not legal rights, they are taken seriously and can be leveraged effectively when challenged.

What are your rights?

All 16 rights are listed below and the CRA produced video, embedded at the bottom of this article, mentions three of the 16 rights that they want to highlight.

Taxpayer right number three says you have the right to privacy and confidentiality. The CRA takes the security of your information very seriously. Auditors must respect the confidentiality of tax information and are obliged to take safeguards to protect your information.

“Administrative rights, such as right number five, say that you have the right to be treated professionally, courteously, and fairly. These standards govern the relationship that the CRA guarantees to taxpayers.”

Another of the relevant taxpayer rights is number six, the right to complete, accurate, clear, and timely information.

“You should expect to be kept informed throughout the audit.”

In addition to the Taxpayer Bill of Rights, there is a five-part Commitment to Small Business:

  1. The CRA is committed to administering the tax system in a way that minimizes the costs of compliance for small businesses
  2. The CRA is committed to working with all governments to streamline service, minimize cost, and reduce the compliance burden
  3. The CRA is committed to providing service offerings that meet the needs of small businesses
  4. The CRA is committed to conducting outreach activities that help small businesses comply with the legislation we administer
  5. The CRA is committed to explaining how we conduct our business with small businesses

The Taxpayer Bill of Rights:

  1. You have the right to receive entitlements and to pay no more and no less than what is required by law
  2. You have the right to service in both official languages
  3. You have the right to privacy and confidentiality
  4. You have the right to a formal review and a subsequent appeal
  5. You have the right to be treated professionally, courteously, and fairly
  6. You have the right to complete, accurate, clear, and timely information
  7. You have the right, unless otherwise provided by law, not to pay income tax amounts in dispute before you have had an impartial review
  8. You have the right to have the law applied consistently
  9. You have the right to lodge a service complaint and to be provided with an explanation of our findings
  10. You have the right to have the costs of compliance taken into account when administering tax legislation
  11. You have the right to expect us to be accountable
  12. You have the right to relief from penalties and interest under tax legislation because of extraordinary circumstances
  13. You have the right to expect us to publish our service standards and report annually
  14. You have the right to expect us to warn you about questionable tax schemes in a timely manner
  15. You have the right to be represented by a person of your choice
  16. You have the right to lodge a service complaint or request a formal review without fear of reprisal

What should you do if you believe your rights have been violated? Sinclair recommends that seeking professional assistance might be the best course of action for those facing CRA challenges.

“Millards Chartered Professional Accountants has a qualified and experienced team of accounting professionals ready to work on your behalf. Please contact us immediately and we’ll help to guide you through the audit process.”

To see the complete Taxpayer Bill of Rights and the CRA’s Commitment to Small Business, visit www.cra.gc.ca/rights.

To learn more about audits, or go to www.cra.gc.ca/audit.

Brad Sinclair’s practice areas include estate planning and succession arrangements for owner-managed businesses, design and implementation of tax minimization strategies for businesses and their owners as well as personal and corporate tax planning.