Audits & Reviews
We at Alfa Tax Return Services will do everything possible…with your help…to minimize the chance that you will be subject to a tax return review by the CRA. But still every year the Canada Revenue Agency randomly selects returns for a review. This does not mean that something is wrong with your return. It is usually a simple request for supporting documents to verify the credits or deductions you have claimed.
Types of Reviews:
- Pre-assessment Review Program: The CRA reviews deductions and credits claimed by the taxpayer before issuing a Notice of Assessment or a refund as the case may be. The peak period for Pre-assessment Reviews is February to July.
- Processing Review Program: The CRA reviews deductions and credits claimed by the taxpayer after issuing a Notice of Assessment or a refund as the case may be. The peak period for Processing Reviews is June to November.
- Matching Program: The CRA compares information on a taxpayer’s tax return to the information provided by third-party sources such as employers and various financial institutions. Items of particular interest to the CRA include verification of employment income; investment income; Canada Child Tax Benefit (CCTB); the Goods and Services Tax/Harmonized Sales Tax (GST/HST) credit; Guaranteed Income Supplement (GIS); Registered Retirement Savings Plan (RRSP) deduction limit; spousal-related claims including child-care expenses, provincial tax credits, and provincial tax reductions. The peak period for Matching Program reviews is September to March.
- Failure to respond to a request by the CRA for information within the time specified.
- Failure to notify the CRA of mailing address changes; a high percentage of taxpayers involved are students.
- Failure to provide all required information slips and/or information slips referred to on the taxpayer’s tax return.
- Failure to make a complete and accurate disclosure of retiring allowances (separation pay) received or transferred to a Registered Retirement Savings Plan (RRSP).
- Failure to follow the rules that govern Registered Retirement Savings Plan (RRSP) deductions…to provide official receipts for amounts contributed (for paper tax returns) and a completed and filed Schedule 7 “Registered Retirement Savings Plan (RRSP) Unused Contributions, Transfers, and Home Buyer’s Plan (HBP) or Lifelong Learning Plan (LLP) Activities” for amounts contributed.
- Inappropriate claim for Annual Union, Professional, or Like Dues.
- Inappropriate claim for Moving Expenses.
- Inappropriate claim for Support Payments made.
- Inappropriate claim for Northern Residents Deductions.
- Inappropriate claim for eligible dependant amount.
- Inappropriate claim for infirm dependent 18 years of age or older amount.
- Inappropriate claim for caregiver amount.
- Inappropriate claim for interest paid on a student loan.
- Inappropriate claim for tuition fees.
- Inappropriate claim for Education and Textbook amounts.
- Inappropriate claim for transferring of Tuition, Education, and Textbook amounts.
- Inappropriate claim for Medical Expenses.
- Inappropriate claim for Public Transit amount.
- Inappropriate claim for Federal Foreign Tax Credit amount.
- Inappropriate claim for Ontario Credit-Occupancy Cost amount.