Got a CRA audit letter? We'll handle it.

Five things trigger most audits. First, your numbers don't match your industry — the CRA compares your margins, expenses, and owner pay against businesses with the same NAICS code. Second, big swings year over year in revenue or specific lines like subcontractors, meals, or vehicle. Third, T-slip mismatches — a T4, T4A, T5, or T5018 someone else filed doesn't match what you reported. Fourth, late or missed filings on your T1, T2, HST, or payroll returns. And fifth, random selection through CRA's compliance programs. Lines they watch closely: shareholder loans, home office claims, vehicle deductions, cash-heavy businesses (restaurants, trades, salons), and HST input tax credits without invoices to back them up. We see the same patterns over and over. The fix is almost always better documentation before you file — not explanations after the letter shows up.

Three things to do, one thing not to. (1) Read the letter and note the deadline. Most CRA letters give you 30 days — and that clock starts the date on the letter, not the day you open it. (2) Call your accountant before you call the CRA. Once we file a T1013 or AUT-01, every auditor call goes to us instead of you. (3) Pull together only the documents the letter asks for. Don't volunteer extra records, extra years, or extra context. And the one thing not to do: don't argue with the auditor by phone or email. Everything you say can be used in the assessment. Honestly? Clients who call us the day the letter arrives almost always get a better result than clients who try to handle it themselves for two weeks and then call us after the auditor's already formed a view.

Yes. Once you sign a T1013 (for individuals) or AUT-01 (for businesses), we become your authorized rep. The CRA auditor calls us, not you. We take the calls, respond to document requests in writing, show up to field audit meetings, and push back on proposed adjustments before they become a reassessment. You don't need a lawyer for this. A tax lawyer only makes sense if the file goes to Tax Court or involves gross negligence or fraud allegations. For about 95% of the audits and objections we handle for Ontario small businesses, an accountant-led response is the right call — and it costs a fraction of what a lawyer charges.

Depends on what type. A desk review — where CRA wants receipts for one or two specific deductions — usually wraps up in 30 to 90 days. A full T2 corporate audit or multi-year T1 audit takes 6 to 18 months, sometimes longer if HST or payroll is also in scope. Field audits where an auditor visits your place run 3 to 9 months from first contact to the proposal letter. After the proposal, you get 30 days to respond. Then comes the reassessment. If you object, add another 6 to 18 months. Here's the part people miss: interest keeps running on any disputed balance the entire time, at CRA's prescribed rate (currently 10% on overdue taxes). So sometimes paying the assessed amount under protest while you fight the objection is actually cheaper than letting interest pile up.

The usual list: bank and credit card statements for the audit period, original invoices and receipts (especially for meals, vehicle, home office, and whatever line they flagged), sales invoices, deposit records, your general ledger and trial balance, HST working papers, payroll register and T4 summaries, shareholder loan details, and the corporate minute book. Under section 230 of the Income Tax Act, you need to keep all of this for six years. But here's what matters most: CRA wants originals. A bank statement shows money left your account — it doesn't prove the expense was for business. Only the invoice or receipt does that. Clients who lose audits almost always lose them because they can't produce the original for the line the auditor picked. That's the real reason we push monthly bookkeeping and digital receipt storage. It's not about being tidy — it's about being ready.

You get two chances to fight back. First, at the proposal stage — you usually have 30 days to respond in writing with more documentation or better arguments before the reassessment is issued. This is the cheapest and fastest place to win. Second, if the reassessment lands anyway, you have 90 days from the date on the Notice of Reassessment to file a Notice of Objection (Form T400A). Or 1 year from the original filing due date, whichever is later. Do not miss the 90-day deadline. It's the most common mistake we see, and once it passes, you lose your right to dispute except through a taxpayer relief application — which is discretionary and harder to win. After the objection, the next step is Tax Court of Canada (informal procedure for amounts under $25,000 per year, general procedure above that), then the Federal Court of Appeal. Taxpayer Relief is a separate track — it can cancel penalties and interest for things like serious illness, natural disasters, or CRA delays. But it doesn't change the tax itself. We handle objections in-house and bring in a tax lawyer only when a file actually needs to go to Tax Court.