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How Often Does CRA Audit Individuals and How To Be Prepared? - A Comprehensive Guide Taking You Through The End-To-End Process

Ever wondered how often the Canada Revenue Agency (CRA) audits individuals and how you can be better prepared? Let's get an in-depth look at the CRA auditing process and evaluate the various options available to individuals - including via the website, mobile app, and call centre. Equip yourself with essential knowledge and insights on this crucial aspect of your financial landscape, so you don't ever get caught off-guard.

Understanding CRA Audits - What Are They, And Why Do They Occur?

The Canada Revenue Agency (CRA) conducts audits to verify the accuracy of tax returns submitted by individuals and businesses. Its primary goal is to maintain fairness across the tax system. Although the scope and frequency of these audits can vary based on several factors, they are generally a routine part of the CRA's operations.

How Often Does CRA Audit Individuals?

On average, the CRA audits approximately 30,000 out of 15 million tax returns filed each year - a figure that barely crosses 0.2%. Keep in mind, these numbers encompass both individuals and businesses. However, certain red flags could potentially increase your chances of being audited.

Initiating The Process – Website, Mobile App, Or Call Centre?

If you're ever subject to a CRA audit, there are three main ways you can approach the situation – via their website, mobile app, or call centre. Let's explore each of these and how they can assist in your auditing process.

Option 1: CRA's Official Website

One of the best resources to understand the CRA's auditing process is by visiting their official website. You'll find multiple sections dedicated to the auditing process, helpful guidelines on what to expect, and resources on how to prepare in case of an audit. They also feature a comprehensive FAQ section and provide transparent communication about your rights and responsibilities throughout the auditing process.

Option 2: MyCRA Mobile App

If you prefer a more mobile-oriented approach, the MyCRA mobile app is an excellent option. It provides a condensed version of the website and is very user-friendly. This app allows for easy navigation between sections and lets you access all the needed information at your fingertips. Keep track of your tax return status, receive instant alerts and stay on top of your financial matters like never before.

Option 3: CRA's Call Centre

For those who prefer person-to-person interaction, the CRA's call centre staff are well-equipped to answer your queries. If you received a letter stating you're being audited, you might find it invaluable to connect directly with these representatives. They can explain the process in detail, guide you on preparing your documents, and answer any audit-related questions you may have.

Preparing for an Audit

Whether an audit is completely random or triggered by specific factors, it doesn't hurt to be prepared. Practice good record-keeping, understand the audit process, and stay informed about your rights and responsibilities. Remember, an audit is not always indicative of wrongdoing; it's merely a check and balance process by the CRA to ensure fairness in the tax system.

Conclusion

Although the frequency of CRA audits is relatively low, understanding the process prepares you for any potential audit. Seeking assistance through the CRA’s website, mobile app, or call centre can be invaluable in navigating the audit process. The key is to stay informed, maintain good records, and be aware of your rights and responsibilities.