Category Archives: Tax Information

Surviving the tax audit process

The following is an excerpt from an article referenced in the Nevcon Accounting resources archives – and it is still timely and relevant today:

According to Canada Revenue Agency’s mission statement, their objective is to promote compliance with Canada’s tax, trade, and border legislation and regulations. Their main tool is the audit process. The majority of taxpayers file relatively simple tax returns with mostly T4 and T5 income. These tax returns do not represent a large compliance risk since tax is withheld at source on the T4 income and the amounts are easily verifiable. Accordingly, many taxpayers who report this type of income may never be audited by the tax department or have any dealings with a tax auditor.

167-tax-tipsThe complete article is found here, on the Globe and Mail web site:

The audit: How to survive a visit from the taxman
by Stephen Thompson
(from 2011/2012)

The book from which the article is excerpted is entitled 167 Tax Tips for Canadian Small Business. Here is an updated link to the book.

Do you need to take a look at the Employers’ Guide to Taxable Benefits and Allowances?

Canada Revenue Agency advises you to use this guide (download it here or click on the book graphic) if you are an employer and you provide benefits or allowances to your employees, including individuals who hold an office, for items such as:

tax-guide-cover

  • automobiles or other motor vehicles;
  • board and lodging;
  • gifts and awards;
  • group term life insurance policies;
  • interest-free or low-interest loans;
  • meals;
  • security options;
  • tool reimbursement or allowance;
  • transit passes; or
  • tuition fees.

If you or a person working for you is not sure of the worker’s employment status, either one of you can request a ruling to determine the status. If you are a business owner, you can use the “Request a CPP/EI ruling” service in My Business Account. For more information, go to cra.gc.ca/mybusinessaccount. You can also use Form CPT1, Request for a Ruling as to the Status of a Worker Under the Canada Pension Plan and/or the Employment Insurance Act, and send it to your tax services office.