A CRA audit needs a clear explanation of the full record
Peterborough taxpayers may receive a CRA audit request involving a small business, professional or contract work, rental property, GST/HST, payroll, personal banking, investment reporting, tuition or a tax claim. A file may include different sources of income and records stored in bank accounts, invoices, lease files, email, payment platforms, and accounting software. CRA may see a number on a return or a deposit in an account without seeing the facts that explain it.
The audit notice usually sets out the years under review, account, documents requested, CRA contact, and deadline. It may concern income, expenses, GST/HST, payroll, rental activity, property use, deposits, or a personal claim. A thoughtful response addresses the questions being asked and shows how the reported figures were determined. It should not rely on a pile of documents without a guide to their relevance.
Tax Help Canada helps Peterborough residents, students, contractors, business owners, landlords, property owners, professionals, and families manage CRA audit files. We review the scope, organize evidence, prepare reconciliations and explanations, communicate with CRA, and help assess a proposal or reassessment before deadlines create added pressure.
Begin with the CRA question, not the document list
CRA may request statements, invoices, receipts, contracts, GST/HST returns, payroll reports, property records, tenant information, or a written explanation. A bank-deposit review may be testing income. A property question may concern rent, personal use, repairs, or capital improvements. A worker-payment request may concern payroll or whether a person was correctly treated as a contractor.
Business records can include customer invoices, client payments, equipment, vehicles, subcontractors, expenses, payroll, and GST/HST. Rental records can include leases, deposits, financing, taxes, insurance, repairs, and periods of personal use. A personal claim may require slips, receipts, educational records, banking, and an explanation of the amount claimed. This early review identifies evidence that must be obtained from banks, suppliers, clients, tenants, property managers, former advisers, or online services.
Reconcile sales, rent, deposits, and tax collected
CRA may compare return income with invoices, deposits, payment reports, GST/HST filings, and third-party information. A deposit may be sales revenue, rent, tax collected, a transfer, loan proceeds, reimbursement, refund, or funds received for someone else. The significant amounts need an evidence-based source.
We prepare schedules linking business sales to invoices and payment reports, rent to leases and deposits, and transfers to other account movements. Loans, refunds, reimbursements, merchant fees, and other non-income deposits are supported by records. This explains why gross sales, bank deposits, and GST/HST amounts may differ line by line and helps prevent CRA from treating a non-income amount as unreported revenue.
Expenses need their own support. Equipment, vehicles, home office, supplies, travel, repairs, property costs, and contractor payments must be connected to an income-earning purpose. Where an expense has a personal component, the allocation should be reasonable and documented.
Rental property needs a factual timeline
CRA may ask when a property was rented, how rent was received, whether it was personally used, what costs were claimed, and whether work was a repair or an improvement. A property that has tenants during part of the year, or is held for different purposes over time, needs a clear factual timeline.
We organize leases, tenant or booking information, deposits, property tax, insurance, financing, invoices, contractor descriptions, and personal-use records. Shared costs need a reasonable allocation. Renovation work should be described through the work performed because CRA may treat an enduring improvement differently from a current repair.
Look at every connected account
An audit may begin with a T1 return yet affect GST/HST, payroll, corporate records, business banking, rental activity, and personal reporting. A sole proprietor’s income should align with deposits and GST/HST. An incorporated owner may have payroll, shareholder transactions, expenses, and personal income. Reviewing those links before responding reduces inconsistent answers and identifies potential tax, interest, penalties, payment, and collections exposure.
Rebuild incomplete files from credible sources
Older records can be incomplete after lost receipts, a bank change, a closed supplier account, an unavailable online portal, or a former bookkeeper. Bank and card statements, suppliers, clients, tenants, contracts, email, property documents, accounting backups, prior returns, and CRA information can help reconstruct a factual position. The purpose is to build the best accurate record available, not to use unsupported estimates.
The reconstruction should show the method. Sales can be matched to invoices and deposits; expenses to statements and vendor records; rent to lease and banking history. This lets CRA follow and test the explanation.
Communicate carefully and review a proposal
CRA may follow up by phone, letter, email, meeting, or secure upload. We help prepare written submissions identifying the audit question, facts, calculation, and support, while keeping a clear log of requests and responses. A deadline should be addressed early; if essential records are still being collected, an appropriate request for more time may be possible before it expires.
CRA may accept the reporting, request final information, send a proposal, or issue a reassessment. A proposal can expose an overlooked record or incorrect assumption while there is still an opportunity to respond. Once reassessed, objection deadlines, interest, penalties, payment arrangements, and collections issues may apply.
Get a clear audit plan
If CRA has contacted you about a Peterborough audit, a confidential review can make the next step manageable. We will review the years and accounts, CRA’s questions, available evidence, and the business, rental, student, property, or personal facts needing explanation. From there, you can respond with an organized plan grounded in evidence.