Why is CRA Auditing My Business?
Most corporate returns are e-filed with CRA, and starting January 1, 2013, almost all corporate tax returns will be required to be e-filed with CRA. Electronic transmission gives them easy access to analyze your financial data. Don’t be surprised if you get a corporate tax audit if:
- You’ve had a bad year and carry back your tax losses to a year when you had taxable income.
- Some of your expenses are much higher than last year.
- Your financial ratios are very different to industry averages for your type of business.
- You’ve had another audit such as a payroll or HST audit that didn’t go well.
- You’re in an industry that CRA is currently focusing on.
- You’ve recently let go of a disgruntled employee or business partner. They are often a source of information for CRA.