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Rights and Responsibilities during a CRA Audit

Updated: Oct 28, 2023

During a Canada Revenue Agency (CRA) audit, both taxpayers and the CRA have rights and responsibilities to ensure a fair and transparent process. It's important to understand these rights and responsibilities to navigate the audit process effectively. Here's an overview of the key rights and responsibilities of both parties:

Taxpayer Rights:

  1. Right to Privacy: Taxpayers have the right to privacy, and their personal and financial information should be kept confidential by the CRA.

  2. Right to Representation: Taxpayers have the right to be represented by a qualified tax professional, such as an accountant or tax lawyer, during the audit process. This representative can communicate with the CRA on the taxpayer's behalf.

  3. Right to Information: Taxpayers have the right to request information about the audit process, including the reasons for the audit and the specific issues being examined.

  4. Right to Appeal: If the taxpayer disagrees with the audit findings, they have the right to appeal the CRA's decision through the formal appeals process.

  5. Right to Be Informed: Taxpayers have the right to be informed of their tax obligations, including the applicable tax laws and regulations.

Taxpayer Responsibilities:

  1. Cooperation: Taxpayers are obligated to cooperate fully with the CRA during the audit. This includes providing all requested documentation and information promptly.

  2. Accuracy: Taxpayers are responsible for ensuring the accuracy and completeness of their tax returns and supporting documents. Errors or omissions may result in penalties or interest charges.

  3. Documentation: Taxpayers should maintain records and documentation related to their income, expenses, and deductions for the required retention period (usually six years).

  4. Communication: Taxpayers should communicate with the CRA and respond to audit requests promptly. Failure to do so can result in penalties.

  5. Appeal Process: If a taxpayer disagrees with the audit findings, they should follow the appropriate procedures to appeal the decision within the specified timeframe.

CRA Rights:

  1. Access to Information: The CRA has the right to access relevant financial and tax records of the taxpayer under audit.

  2. Interviews: The CRA can conduct interviews with the taxpayer, their representatives, or third parties to gather information and clarify issues.

  3. Assessment: The CRA has the authority to assess tax liabilities, interest, and penalties based on the audit findings.

  4. Information Sharing: The CRA can share information with other government agencies and departments, such as provincial tax authorities, when necessary.

CRA Responsibilities:

  1. Transparency: The CRA is responsible for providing clear and understandable information to taxpayers about the audit process and their rights and responsibilities.

  2. Professional Conduct: CRA employees must conduct themselves professionally and respectfully during the audit process.

  3. Timely Communication: The CRA should communicate audit findings and decisions to the taxpayer promptly.

  4. Appeal Process: The CRA must provide information to taxpayers on how to appeal audit results if they disagree with them.

  5. Confidentiality: The CRA must maintain the confidentiality of the taxpayer's information.

Both taxpayers and the CRA need to act according to these rights and responsibilities to ensure a fair and efficient audit process. If any disputes arise, taxpayers have the option to seek assistance from a tax professional or explore the appeal process to resolve the issue.

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