Greater Toronto Area taxpayers need a focused response when CRA starts an audit
A CRA audit can affect a Greater Toronto Area taxpayer’s personal returns, business, corporation, rental property, GST/HST, payroll account, or several connected files. The letter may request a limited group of documents, but CRA can compare the response with banking activity, property information, third-party slips, prior returns, and related accounts. The most useful first step is to identify exactly what CRA is reviewing, the records required, and the deadline before providing information without a clear strategy.
Tax Help Canada helps Greater Toronto Area taxpayers manage CRA audits from the first document request through a proposal, reassessment, objection, or payment decision. We review the years, accounts, records requested, correspondence, deadline, returns, and potential exposure. We help organize evidence, reconcile figures, prepare schedules and factual explanations, and communicate with CRA where authorized. If CRA has already proposed or issued an adjustment, we examine the calculation and potential next steps before the taxpayer accepts an outcome.
The CRA letter defines the immediate task
CRA letters normally identify the taxpayer or business under review, the tax years or periods, the relevant CRA account, documents requested, an auditor contact, and a due date. A request for invoices can relate to income, business expenses, GST/HST credits, rental costs, or corporate transactions. A request for banking may concern deposits, sales, shareholder payments, or income CRA has not matched to a return. Understanding the purpose of each request allows for a response that deals with CRA’s actual question.
CRA may choose a return for review because it has third-party information, sees a deduction requiring support, finds a difference between income tax and GST/HST reporting, receives property data, or needs clarification about financial activity. An audit is not proof of an error. It is a request for evidence. We review the letter beside filed returns, books, and account history so the response is focused and any connected accounts are considered.
Common CRA audit issues include:
Contractor, professional, business, vehicle, home office, travel, meals, equipment, and expense claim reviews
Corporate income, shareholder loans, benefits, bonuses, dividends, management fees, and personal costs paid by a corporation
Rental income, repairs, capital improvements, principal residence claims, and property sale reporting
GST/HST collected, input tax credits, taxable sales, registration, and revenue reconciliation
Payroll source deductions, T4 filings, worker classification, and payments to employees or contractors
Foreign income, foreign property, T1135 reporting, lifestyle questions, net-worth calculations, and possible penalties
The evidence should explain the complete filing position
CRA needs a clear link between source records and the figures reported. For a business, that can mean reconciling contracts, invoices, deposits, expenses, HST, and worker payments. For a corporation, books and banking should align with shareholder loans, payroll, HST, and personal reporting. For property activity, CRA may need evidence of purchase, ownership, use, rental income, financing, repairs, improvements, and sale. A clear package helps the auditor evaluate the actual facts without relying on partial records.
We may review bank and credit-card statements, invoices, contracts, supplier records, accounting reports, CRA slips, ledgers, corporate records, shareholder loan schedules, HST returns, payroll reports, rental agreements, and property documents. Relevant material is organized by year and audit issue, and key amounts are reconciled to what was filed. If a receipt or old bookkeeping file is unavailable, credible alternate evidence may support a reconstruction. Any reconstruction must be factual and consistent with related CRA accounts.
Business and corporation audits can overlap with personal tax issues
Greater Toronto Area contractors, consultants, professionals, and business owners may be asked to support sales, vehicle and home-office claims, equipment, travel, meals, and worker payments. CRA can compare invoices with deposits and compare income tax reporting to GST/HST and payroll filings. Expenses require a business purpose and personal portions need a reasonable allocation. Clear schedules can show the full business activity instead of leaving CRA to infer the facts from isolated transactions.
For owner-managed corporations, CRA may review shareholder loans, benefits, dividends, bonuses, management fees, vehicles, personal expenses paid by the company, and related-party payments. It can compare corporate books and banking to the shareholder’s personal returns, HST filings, payroll reports, and third-party data. We organize activity by reporting period to determine whether a difference is a bookkeeping issue, a supported business transaction, or a potential adjustment requiring further analysis.
Property, GST/HST, and payroll require separate support
Rental and property audits can involve income, mortgage interest, repairs, improvements, ownership, personal use, principal residence claims, and property sales. The facts can determine whether a cost is a repair or an improvement and how a sale should be reported. GST/HST audits can focus on taxable sales, tax collected, input tax credits, registration, invoices, and revenue reconciliation. Payroll audits can address source deductions, T4s, worker classification, and remuneration.
These accounts follow different rules, but CRA may compare their source records. We organize the evidence by account and period so a legitimate explanation is clear before an adjustment is made.
Review a CRA proposal or reassessment before accepting it
CRA may send a proposal before finalizing an adjustment or issue a Notice of Reassessment after the audit. It can include added income, denied deductions, GST/HST or payroll assessments, interest, and penalties. Before agreeing, the taxpayer should understand the calculation, evidence, factual assumptions, and deadline for more information or a Notice of Objection.
We review the outcome line by line and consider the appropriate next step. It may be more evidence, a factual correction, an objection, taxpayer relief where appropriate, or payment planning after the correct balance is known. The goal is an outcome based on actual facts rather than an estimate created by gaps in the response.
Why Greater Toronto Area taxpayers choose Tax Help Canada
CRA audit work requires organized evidence, careful deadlines, and an understanding of how personal, business, corporate, GST/HST, payroll, and property accounts interact. Tax Help Canada focuses on CRA tax resolution work, including audits, reassessments, objections, unfiled returns, voluntary disclosures, GST/HST, payroll, taxpayer relief, collections, corporate tax, rental tax issues, and foreign reporting.
If you are in the Greater Toronto Area and CRA has requested records, opened an audit, proposed an adjustment, or issued a reassessment, a confidential review can help you understand the scope and prepare the next response properly.