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Difference between CRA civil and criminal audits

Difference between CRA civil and criminal audits

A world of difference between CRA civil and criminal tax audits

Source: Canadian Accountant
Author: David J. Rotfleisch

TORONTO, May 8, 2018 – Most accountants have dealt with Canada Revenue Agency tax audits and auditors many times in their careers. The auditor will request various books and records from the taxpayer and the accountant that are usually provided as a matter of course. The power of the auditor to request those records, and to attend at the business premises of the taxpayer and ask questions, is set out in section 231.1 of the Income Tax Act. The Act gives the tax auditor broad audit powers for administration and enforcement.

This is a normal part of the tax audit with which accountants are well familiar.

What happens if the taxpayer does not cooperate? Section 231.7 allows the CRA to apply to the Federal Court of Canada for a compliance order requiring that the taxpayer respond to the section 231.1 requests. At this point, the accountant is out of the normal tax audit process and into tax lawyer territory.

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