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Format And Process of The Tax Audit Interviews
An auditor can schedule an interview with a taxpayer and any persons virtually or in person. In-person interview locations can be the taxpayer's place of business or a CRA premise. During the interview, the tax auditor will generally ask taxpayers questions and review relevant documents. If a taxpayer attends an audit interview with a Canadian tax lawyer, the lawyer can assist the taxpayer in addressing any questions from the auditor. In particular, if an auditor starts to inquire about the communication between the taxpayer and his or her lawyer, or any other inappropriate questions, the taxpayer's experienced Canadian tax lawyer who's present at the interview, will normally intervene. The lawyer's intervention then prevents the taxpayer from disclosing information that is otherwise not required to be provided to the CRA.
After the tax audit interview, the CRA may have follow-up questions for the taxpayer. Subject to solicitor-client privilege, CRA officials can also require a taxpayer or a taxpayer's representative, to produce working papers "that relate to a taxpayer's books and records that may be relevant for any purpose related to the administration or enforcement of the tax laws." If the taxpayer's lawyer is present at the audit interview, the lawyer will be more prepared to assist with the taxpayer preparing any working papers required by the CRA. The taxpayer's lawyer can ensure that the CRA officials are not requesting "voluminous, duplicative material" where there are other less burdensome alternatives that could serve to support the taxpayer's position. In addition, the presence of a lawyer during an audit interview helps to ensure that the CRA is only requesting information or asking questions that are relevant to and reasonable for the tax audit.
Recording Policies of The Tax Audit Interviews
The CRA refuses to allow auditors to be recorded when conducting an oral audit interview, whether the interview is in person or by videoconference. However, paragraph 4.6.5 of the Income Tax Audit Manual clearly states that "CRA has no legal authority to prevent a taxpayer from video or audio taping an interview, audit, or examination at their own premises." The CRA, as a result, requires that CRA employees must not consent to being videotaped or recorded when meeting with a taxpayer and his or her representatives. If a taxpayer or representative intends to videotape or record the audit interview, the CRA policy is that the meeting must be "terminated immediately" and the CRA will be in contact with the taxpayer to make other arrangements.
Taxpayers are likely also concerned about the CRA's attempt to videotape or record the audit interview. Although there exists no clear CRA policy stating whether or not the CRA will or can record any audit interviews, there are other provincial and federal legislations that prevent unauthorized recordings, notwithstanding exceptional circumstances. For example, for individual taxpayers in
Pro Tips - Know Your Rights Before Attending a Tax Audit Interview!
The CRA policies regarding tax audit interviews or any CRA activities are constantly being updated. These policies are applicable to taxpayers whether or not they are fully aware of the effect and application of the policies. Without knowing your rights, you may disclose unnecessary information during an audit interview. Even if the CRA can not record or videotape an audit interview without your consent, the CRA can use your answers to their questions during a Tax Audit Interview against you.
It is therefore necessary and advantageous for taxpayers to engage with an experienced tax lawyer before attending a scheduled CRA tax audit interview. Our expert Canadian tax lawyers can provide legal advice on your rights and obligations before, during, and after the tax audit interview. We can also assist you with the tax audit process. You can read more about our successful cases here: https://taxpage.com/case-results/.
FAQ
Do I Have To Attend A Scheduled Tax Audit Interview With The
When the CRA sends an audit interview request, there is no obligation for a taxpayer or any other person to attend the interview. However, the refusal to attend a scheduled audit interview can result in a negative finding against the taxpayer since the CRA will likely deem the taxpayer unwilling to cooperate. If the proposed date and time for the audit interview does not work for you, you should be able to request to reschedule an audit interview with the CRA.
What Will Happen During and After An Oral Tax Audit Interview?
During an oral tax audit interview, the auditor, as well as other CRA officials who are present at the interview, will ask questions related to the ongoing audit. If you have received and completed a tax audit questionnaire prior to the audit interview, the questions are likely related to the answers you have provided to the CRA. Alternatively, the CRA may have discovered new information and ask for clarification and elaboration. The audit interview is unlikely to be recorded and you should not record the interview unless you have received consent from the CRA officials attending the interview. However, due to the CRA policy against recording and videotaping, your request to record will likely result in a termination of the scheduled interview.
After the audit interview, the CRA may have follow-up questions the and/or require you to produce working papers "that relate to a taxpayer's books and records that may be relevant for any purpose related to the administration or enforcement of the tax laws."
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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