The Difference Between a CRA Audit and a Reassessment
If you have received a notice from the Canada Revenue Agency (CRA), you might be feeling anxious or uncertain about what comes next. Whether it is a CRA audit or a tax reassessment, these situations can be confusing and stressful.
The good news is that education is key. By understanding the difference between a CRA audit and a tax reassessment, you will know how to approach the situation and what to expect. Keep reading to break it down and explore the distinctions between these two processes.
What is a CRA Audit?
A CRA audit happens when the Canada Revenue Agency decides to take a closer look at your tax filings to ensure everything is accurate. Common reasons for a CRA audit include unreported income, discrepancies between your return and third-party information, or significant deductions that don’t seem to align with your reported income.
During a CRA audit, the agency will request documentation to verify the accuracy of your claims, including receipts, financial statements, and other supporting materials. Audits can feel invasive, but they are generally more routine than you might think.
What is a Tax Reassessment?
A tax reassessment occurs when the CRA has completed its audit or review and has determined that changes to your tax return are needed. The notice of reassessment outlines any discrepancies the CRA has found and explains how your taxes have been recalculated. The reassessment may lead to you owing more taxes, including penalties and interest. This is the point where things can get particularly complicated.
If you receive a notice of tax reassessment, you have a limited window of time to challenge it by filing a notice of objection! This is also where a skilled tax lawyer may come into play.
What to Expect During a Tax Dispute Appeal
Navigating a tax dispute appeal process can be daunting. Filing an objection to a tax reassessment involves presenting the facts and providing evidence that supports your position. If your dispute escalates, you might even end up in tax court, which is why having the right professional guidance is essential.
Get Legal Support from Experienced Lawyers
At Taxpayer Law, we understand how stressful dealing with a CRA audit or tax reassessment can be. Our experienced tax lawyers are here to support you every step of the way. Whether you are undergoing an audit or need assistance with a tax appeal, we have the expertise to protect your rights and help you achieve the best possible outcome.
You do not have to face this alone, contact us today for experienced support and peace of mind!