How Far Back Can The CRA Audit You | Former CRA Auditor Weighs In

March 20, 2023 Andrew AdolphAudits

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How far back can the CRA audit you? If you’re worried about this, you’re not alone. In this blog, we’ll explore the rules surrounding CRA audits, including how far back they can go and what you can do to protect yourself. 

How far back can the CRA audit you? 

The CRA has the power to audit you for up to three years after the date of your tax assessment. However, if the CRA believes that you have made a mistake through negligence, they can go back much further – up to 10 years. 

What triggers a CRA audit? 

There are many factors that can trigger a CRA audit. One of the most common is a discrepancy between the information on your tax return and the information the CRA has on file. The most common scenario is where they have evidence of a transaction that has taken place, and you do not appear to have reported it, or not filed a tax return for the period in question. 

What happens during a CRA audit? 

If you’re selected for a CRA audit, you’ll receive a letter informing you of the audit and what documents you need to provide. During the audit, the CRA will review your tax return and supporting documents to ensure that you’ve reported all of your income have receipts and documents to support any of the expenses you have claimed.  

What should you do if you’re audited? 

If you’re selected for a CRA audit, it’s important to cooperate and not ignore the situation, as it will annoy the auditor and may cause them to reach out to your customers, suppliers or bank for enough information to support an audit assessment against you. This is the point where you hire someone like GTC Gateway Tax CPA Inc. for help. Even if you are planning to go it alone, call us for a free consultation and we can help answer some of the questions you have. 

How to reduce your risk of a CRA audit 

While there’s no guaranteed way to avoid a CRA audit, there are things you can do to reduce your risk. First, ensure that your tax return is accurate and complete, and filed on time. Keep good records and keep all supporting documentation for at least six years. If you’re self-employed, ensure that you’re following all the rules surrounding deductions and expenses. 

How Far Back Can The CRA Audit You: The Bottom Line 

So how far back can the CRA audit you? Up to three years after the date of your tax assessment, but if they believe you’ve committed fraud or knowingly made a false statement on your tax return, they can go back up to 10 years. 

Being selected for a CRA audit is usually unfamiliar territory, so consider getting some help onboard for this.  

If you want more information about how to avoid the CRA click this link here about the top 5 CRA triggers to avoid. You can also check out the CRA website or book a free consultation with me if you need more info about how far back the CRA can audit you. 

Andrew Adolph

Andrew Adolph is a CPA and former CRA auditor with 25 Years of experience. He helps businesses to not par any more in sales taxs than the law says they must and acts as an advocate for you if you are being audited, so you can fous on your business.