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Net Worth Audits are Incredibly Dangerous to Taxpayers!

We have a serious concern about this new mandate by CRA to focus on Net Worth Audits. This is a serious game they are playing. It is now part of a regular audit to fill out a form at the end of a normal audit where an auditor has to state why no Net Worth Assessment was made.

If CRA has any question as to how you were able to live on such a low net income, you will be subjected to a NIGHTMARE of paperwork. They will ask questions that you have no need to answer. They will give you a form to fill out that could end up causing you to pay taxes on absurd assumptions.

At the first indication of an Auditor’s interest in this direction, do not answer any further questions and then get professional help and do it immediately.

As a result of this new vendetta by CRA we are no longer allowing home visits by CRA auditors. We used to allow them if the taxpayer was not home and then only to have them verify business use of home.

Now due to this new aggressive tax grabbing behavior by CRA, we will work with diagrams, sketches, written overviews and photographs.

CRA auditors often are surprised to learn that if the taxpayer has a Tax Representative, they don’t need to have an interview with the auditor and the auditor has no right to enter a principle residence without a court order, which is not easy to get.

We here at TAS are shoring up our arsenal to confront this tax grab head on. There are lots of ways to put a stop to this and we will exercise all of them. It is unfair, unwarranted and it is clearly abusive. CRA better back off this with our clients. It is outrageous.

Simply stated; “I am dumbfounded that CRA would go to such levels to increase their cash flow.” This kind of behaviour by CRA is what is going to create even greater Canadian ire against CRA tax audit abuse.

As a result of this new aggression, we are modifying our audit ready bookkeeping system, to stop Net Worth Audits before they get started. We are also building in HST automated calculations across the categories and the tax jurisdictions in Canada.

In knowledge there is strength. Be informed of your rights.

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