CRA found more than $1B auditing smaller businesses last year
Audits of small and medium sized businesses for the 2018-2019 fiscal year has yielded over a billion dollars owed to the CRA, with an average of 137,000 per small business owed and 338,000 per medium business. The amount owed included back taxes, penalties and interest. The CRA is more diligent in identifying businesses requiring an audit due to it’s use of identifying cases of indirect verification of income. The CRA is continuing to scrutinize how businesses report income and audits will likely increase in the upcoming years.
“The most recent common audit issues or areas of concern were unreported income, capital transactions, corporate reorganizations and restructurings, ineligible expense claims, and related-party transactions.”