A CRA audit needs the details behind the return entries
The Beaches taxpayers may receive a CRA audit request involving professional income, an owner-managed business, contract work, rental property, GST/HST, payroll, personal banking, investments, or a deduction claimed on a return. The records can be split across invoices, payment reports, statements, lease files, brokerage documents, receipts, email, and accounting software. CRA may see a return entry or a deposit without seeing the fact pattern that explains it.
The audit notice normally identifies the years under review, account, requested documents, CRA contact, and deadline. It may test income, expenses, GST/HST, payroll, property use, rental activity, deposits, investments, or a personal claim. A useful response follows the issue CRA is testing. It should explain the calculation and show which documents support the result, rather than provide a large collection of files without a roadmap.
Tax Help Canada helps The Beaches 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 a deadline narrows the available options.
Start with CRA’s specific question
CRA may request bank statements, invoices, receipts, contracts, GST/HST returns, payroll reports, property documents, investment records, or a written explanation. A review of deposits can test reported income. A property request may concern rent, personal use, repairs, a capital improvement, or a sale. A worker-payment request may concern payroll deductions or contractor classification.
Professional and business files can include client invoices, customer payments, equipment, vehicles, expenses, payroll, and GST/HST. Rental records can include leases, deposits, financing, taxes, insurance, repairs, sale documents, and personal-use history. Investment records can explain transfers, proceeds, income, and tax slips. This early review identifies missing material in time to request it from banks, suppliers, clients, tenants, property managers, investment firms, former bookkeepers, or online portals.
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, investment proceeds, or money received for another person. Significant amounts should have a documented source.
We prepare schedules linking sales to invoices or payment reports, rent to leases and deposits, transfers to matching account movements, and investment items to the relevant records. Loans, reimbursements, refunds, merchant fees, and other non-income amounts need support. This helps explain why gross sales, deposits, and GST/HST may not match line by line.
Expenses require the same attention. Vehicles, equipment, home office, supplies, travel, repairs, property costs, and worker payments need evidence and an income-earning purpose. Where personal use exists, the allocation should be reasonable and documented.
Review related accounts together
An audit can start with a personal return yet affect business banking, GST/HST, payroll, corporate records, rental activity, investment reporting, and other personal accounts. 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 consider the connections 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 credible 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, investment firms, contracts, email, property records, accounting backups, prior returns, and CRA information can support a factual reconstruction. The objective 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, rent to leases and banking history, and investment amounts to the relevant statements. This 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 log of requests and responses. If historic statements, duplicate invoices, payroll reports, investment records, 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 The Beaches 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, investment, rental, or personal facts requiring explanation. From there, you can respond with an organized plan grounded in evidence.