A CRA audit needs an evidence-based explanation of the tax position
Stratford taxpayers may receive a CRA audit request involving professional or creative work, a contractor business, property, rental income, GST/HST, payroll, personal banking, or a deduction claimed on a return. The supporting evidence can be divided among contracts, invoices, payment platforms, statements, receipts, property files, email, and accounting systems. CRA may see a number on a return or a deposit without seeing the engagement, sale, or expense behind it.
The audit letter normally identifies the years under review, the account, requested documents, CRA contact, and deadline. It may test income, expenses, GST/HST, payroll, property use, rental activity, deposits, or a personal claim. A good response follows the issue CRA is testing and shows how the reported amount was calculated. It should not leave the auditor to reconstruct the taxpayer’s position from an unlabelled collection of documents.
Tax Help Canada helps Stratford residents, professionals, 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 added pressure.
Identify the question behind CRA’s request
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 a capital improvement. A worker-payment question may concern payroll deductions or contractor classification.
Professional and creative files may include client agreements, invoices, payment reports, equipment, expenses, travel, home office costs, and GST/HST. A contractor may have project records, vehicles, tools, supplier costs, and client payments. Rental files can include leases, deposits, financing, taxes, insurance, repairs, and personal-use information. The first review identifies missing material early enough to request it from banks, clients, suppliers, tenants, property managers, former bookkeepers, or online services.
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 may be business revenue, rent, tax collected, a transfer, loan proceeds, reimbursement, refund, or money received for another person. Important items require a credible source.
We prepare schedules linking sales or fees to invoices and payment reports, rent to leases and deposits, and transfers to matching account movements. Loans, reimbursements, refunds, merchant fees, and other non-income amounts should be supported. This helps explain why gross revenue, 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.
Related accounts must provide a consistent record
An audit may start with a personal 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 fit actual rental and personal use.
We look for 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 inconsistent answers and helps identify potential tax, interest, penalties, payment, and collections exposure.
Reconstruct 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, tenants, contracts, email, property records, accounting backups, prior returns, and CRA information can support a factual reconstruction. The objective is the best accurate evidence, not an unsupported estimate.
The method should be transparent. Revenue can be tied to invoices and deposits, expenses to statements and vendor records, and rent to lease and banking history. This lets CRA test the response using the available evidence.
Keep communication and timing under control
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 log of requests and responses. If historic statements, duplicate invoices, payroll reports, or property documents 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 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 Stratford audit, a confidential review can make the next step manageable. We will review the years and accounts, CRA’s questions, available evidence, and the professional, business, property, rental, or personal facts requiring explanation. From there, you can respond with an organized plan grounded in evidence.