Q In early March, I
filed my tax return online. I expected a tax refund but got instead a letter
from Revenue Canada
asking for my rent and child-care receipts. Is this an audit? Could I have
avoided this? I have never had a problem
with CRA in the past. What happens if receipts are not available? — Jenny
The letter from CRA is a request to "provide receipts" or a
"request for information." This is not an audit! Simply comply with
their request and nothing more may become of it. These requests are not unusual
and are generally limited to things such as rent receipts, moving expenses,
child care, employment expenses, etc.
However, if you are unable to comply with CRA's request,
your tax return will be reassessed.
Most tax filers generally have very limited dealings with
CRA, particularly if an individual is T4d. Audits are randomly selected, but
some individual tax returns may be selected for audits due to their content.
For example, returns with the following characteristics may be more likely to
be selected for an audit:
.>> Filing several years of delinquent tax
.>> Year after year of consistent business losses.
.>> Claims for tax credits and other low-income
credits when it appears the taxpayer may have more income.
.>> Aggressive and creative tax claims.
.>> Consistent deductions for real estate rental
Should you be selected for an audit, obtain advice from a
Henry Choo Chong, CGA provides professional accounting and
taxation solutions for individuals, businesses and corporations. Henry can be
reached at 416-590-1728, ext. 304. E-mail all questions to Money Matters: