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CRA Inconsistent in Application of Provisions of the Income Tax Act

Having a CPA prepare your tax return will assist in any correspondence and dealings with the Canada Revenue Agency.

The recent Auditor General report highlighted that Canada Revenue Agency (CRA) is inconsistent when it comes to applying the provision of the Income Tax Act, the collection of outstanding taxes and the auditing of taxpayers returns.

Inconsistencies were found between regions of the country and who you are (corporate vs. personal, large taxpayer vs. small taxpayer). They also found inconsistencies between auditors. Who you are, where you live and who is doing the audit all play into how an audit will be performed and the resulting taxes collected.

CRA spends more every year on compliance monitoring. They now have projects where they will audit a large number of specific claims. They have sophisticated analytical tools to identify potential audit areas and use the information gathered in their project audits to identify other areas of interest.

There is enormous pressure to generate more and more revenue for government spending.

While technology is making it easier and easier to file your own tax returns it is disconcerting that CRA is taking advantage of this by inconsistently applying the provisions and policies that are in place to protect the taxpayer.

The Taxpayer Bill of Rights includes the right for the law to be applied consistently.

Having a tax professional prepare your return and assist in any dealings with CRA is your best defense against these inconsistencies. Even if you have prepared your own return, if you find yourself under the scrutiny of CRA, engaging the assistance of a professional to assist with that is well worth it to ensure you are protected.