A CRA audit needs a clear explanation of the transactions under review
St. Thomas 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. The evidence may be split across invoices, statements, receipts, contracts, property records, payment systems, and accounting software. CRA may see a number reported on a return or a deposit in an account without knowing the transaction and business fact behind it.
The audit notice normally sets out the tax years, account, documents requested, CRA contact, and deadline. It may test income, expenses, GST/HST, payroll, property use, rental activity, deposits, or a personal claim. A response should be organized around that issue. It should show the calculation and point CRA to the records supporting it, rather than leave the auditor to interpret an unstructured document bundle.
Tax Help Canada helps St. Thomas residents, contractors, business owners, landlords, property owners, and families manage CRA audit files. We review scope, organize evidence, prepare reconciliations and explanations, communicate with CRA, and help assess proposals or reassessments before deadlines create additional pressure.
Identify CRA’s question before preparing a response
CRA may ask for bank statements, invoices, receipts, contracts, GST/HST returns, payroll reports, property documents, or a written explanation. A deposit review may test reported income. A property request may concern rent, repairs, personal use, or a capital improvement. A worker-payment request can concern payroll deductions or contractor classification.
Contractor and business records can include agreements, invoices, customer payments, vehicles, equipment, expenses, payroll, and GST/HST. Rental files can include leases, deposits, financing, taxes, insurance, repairs, and personal-use history. This first review identifies missing documents early enough to request them from banks, suppliers, clients, property managers, former bookkeepers, or online accounts.
Reconcile income, deposits, and GST/HST
CRA may compare return income with invoices, deposits, payment reports, GST/HST filings, and third-party information. A deposit is not automatically income. It could be sales revenue, rent, tax collected, a transfer, loan proceeds, reimbursement, refund, or money received for another person. Material items should be traced to credible records.
We prepare schedules linking sales to invoices or payment reports, rent to leases and deposits, and transfers to matching account movements. Loans, reimbursements, refunds, merchant fees, and other non-income amounts need support. This helps explain why gross sales, bank deposits, and GST/HST may not match line by line.
Expenses need the same attention. Vehicles, equipment, home office, supplies, travel, repairs, property costs, and payments to workers need evidence and an income-earning purpose. Where personal use exists, the allocation should be reasonable and documented.
Look at related accounts as one file
An audit may begin with a personal return but reach business banking, GST/HST, payroll, corporate records, rental activity, and other 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 the actual rental and personal use.
We consider these links before detailed submissions are made. A deposit explanation should agree with books and GST/HST. Worker payments should fit payroll and expense records. This reduces contradictory answers and helps identify potential tax, interest, penalties, payment, and collections exposure.
Rebuild incomplete records from reliable sources
Older records 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 goal is the best accurate evidence available, not an unsupported estimate.
The reconstruction should show its method. 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.
Control communication and the deadline
CRA may follow up by phone, letter, email, meeting, or secure upload. We help prepare written submissions identifying the audit question, facts, calculation, and evidence, while keeping a clear log 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 reveal an overlooked document or incorrect assumption while there is still a chance 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. Thomas 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.