A CRA audit needs an explanation that is supported from start to finish
St. Marys taxpayers may receive a CRA audit request involving a contractor, small business, rental property, GST/HST, payroll, personal banking, or a deduction claimed on a return. Records may sit across invoices, statements, receipts, contracts, property documents, email, payment platforms, and accounting software. CRA may see a deposit or an expense without seeing the transaction, purpose, or record trail behind it.
The audit letter normally identifies the years under review, the account, information requested, CRA contact, and deadline. It may concern income, expenses, GST/HST, payroll, property use, rental activity, deposits, or a personal claim. A useful response is structured around that question. It explains the calculation and points CRA to relevant evidence instead of submitting files without context.
Tax Help Canada helps St. Marys residents, contractors, business owners, landlords, property owners, 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 a deadline creates further pressure.
Identify the CRA issue before replying
CRA may ask for bank statements, invoices, receipts, contracts, GST/HST returns, payroll reports, property documents, or a written explanation. A review of deposits may test reported income. A property request can concern rent, personal use, repairs, or an improvement. A worker-payment request can concern payroll deductions or contractor classification.
Business and contractor files can include contracts, client invoices, customer payments, equipment, vehicles, expenses, payroll, and GST/HST. Rental records can include leases, deposits, financing, taxes, insurance, repairs, and personal-use history. The initial review identifies missing material early enough to obtain it from banks, suppliers, clients, property managers, former bookkeepers, or online accounts.
Reconcile income, deposits, and GST/HST
CRA may compare reported income with invoices, deposits, payment reports, GST/HST filings, and third-party information. A bank deposit is not automatically income. It can be business revenue, rent, tax collected, a transfer, loan proceeds, reimbursement, refund, or money received for another person. Important amounts need a documented source.
We prepare schedules that link sales to invoices or payment reports, rent to leases and deposits, and transfers to corresponding account movements. Loans, reimbursements, refunds, merchant fees, and other non-income amounts require support. This helps explain why gross sales, deposits, and GST/HST do not always match line by line.
Expenses must be handled with equal care. Vehicles, equipment, home office, supplies, travel, repairs, property costs, and payments to workers need proof and an income-earning purpose. If a cost has a personal component, the allocation should be reasonable and documented.
Review connected accounts before detailed submissions
An audit can start with one return but affect business banking, GST/HST, payroll, corporate records, rental activity, and personal reporting. A sole proprietor’s sales should fit deposits and GST/HST. An incorporated owner may have payroll, shareholder transactions, expenses, and personal income. Property costs should make sense given actual rental and personal use.
We consider these links before detailed explanations are sent. A deposit schedule should agree with books and GST/HST. Worker payments should fit payroll and expense records. This reduces inconsistent answers and helps identify possible tax, interest, penalties, payment, and collections exposure.
Rebuild incomplete records from credible sources
Older files can be incomplete after a bank change, lost receipts, unavailable suppliers, a closed online account, or a former adviser. Bank and card statements, suppliers, clients, contracts, email, property records, accounting backups, prior returns, and CRA information can support a factual reconstruction. The aim is the best accurate evidence available, not an unsupported estimate.
The method should be visible. Sales can be tied to invoices and deposits, expenses to statements and vendor records, and rent to lease and banking history. That gives CRA a practical way to test the explanation.
Keep communication and timing controlled
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 record of requests and responses. If historic statements, duplicate invoices, payroll reports, or property records are still being collected, that should be raised before the deadline. In appropriate circumstances, CRA can be asked for more time.
Review a proposal before reassessment
CRA may accept the reporting, request final information, send a proposal, or issue a reassessment. A proposal can identify an overlooked document or incorrect assumption while there is still time to respond. Once reassessed, objection deadlines, interest, penalties, payment arrangements, and collections concerns may follow.
Get a clear audit plan
If CRA has contacted you about a St. Marys 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, property, rental, or personal facts requiring explanation. From there, you can respond with an organized plan grounded in evidence.