How to Avoid CRA Audit Triggers for Personal Income Tax Return

- Top Audit Triggers and what you can do to avoid the attention of CRA

Here are a few of the tips you will receive:

  • Not taking a second look at your return can lead to problems
  • Timing is everything
  • Making too much money could be a bad thing
  • Consistency is a good thing
  • and more!

You may be aware of some of these tips, but if there’s just one that you weren’t aware of it could just be the one that keeps CRA off your back.

You’ll also learn that even if you do everything right when it comes to filing your taxes and obeying CRA’s rules, sometimes your associations, good and bad, will get CRA’s attention.

This is where careful planning comes into play.

This review includes:

  • Your past returns
  • Notices of Assessment
  • Your existing business structure
  • Your personal and family tax situations

As a tax specialist providing small business accounting services and business consulting, we can negotiate with CRA on your behalf to ensure any past discrepancies are dealt with and you come to a resolution that you can live with.

Let AccXpert Measure Your Business Situation and Cut Your Taxes!

Find out about our Audit Protection and how AccXpert can benefit you and your business.

Call 1-613-366-5988 or email to start a conversation.

How tax returns are selected for review

There are a number of reasons why an income tax return may be selected in one of our review programs. These reasons include:

  • random selection;
  • comparison of information on returns to information received from third-party sources, such as T4 information slips;
  • types of deductions or credits claimed and an individual’s review history.Example
    Were you selected for review in a previous year? If yes, was there an adjustment made to the claim that was reviewed?

The process of selecting returns for review is the same whether the return is filed on paper or electronically. Therefore, the chances of a return being selected for review are not impacted by the method used to file the return. We refine the focus of our reviews annually based on review results and problem areas identified.

Most of the 25 million income tax returns filed each year are processed within two to six weeks. The CRA processes most returns without conducting a manual review of the information reported so that a Notice of Assessment and/or refund can be issued as quickly as possible. However, all returns are screened by the Agency’s computer system and may be subject to review at a later date.

As indicated in the General Income Tax and Benefit Guide, you should keep all receipts and documents to support your claims for at least six years in case you are selected for review.

Types of reviews

CRA review programs include the:

  • Pre-assessment Review Program;
  • Processing Review Program;
  • Matching Program;
  • Special Assessment Working Group.

Under these programs, CRA review various income amounts, federal and provincial/territorial deductions, and credits on individual income tax returns to ensure that amounts are reported correctly and that they are properly supported.

Pre-assessment Review Program

The reviews conducted during this program take place before a Notice of Assessment is issued. The peak period for this program is February to July.

Processing Review (PR) Program

Although similar to the Pre-assessment Review program, the reviews conducted during this program take place after the Notice of Assessment has been issued. The peak period for this program is August to December.

Matching Program

The reviews conducted during this program also take place after the Notice of Assessment has been issued. In this program, information on an individual’s income tax return is compared to information provided by third-party sources, such as employers or financial institutions.

The peak period for this program is October to March.

Special Assessment Working Group

The reviews conducted during this program can take place before or after a Notice of Assessment has been issued.

The Special Assessment Working Group conducts a more in-depth review of the income tax return. This group identifies and gathers information on trends and situations in areas of non-compliance that may represent a risk to the self-assessment system.

All requests for information are sent directly to the taxpayer. This includes taxpayers who have authorized someone to act on their behalf such as a tax preparer.