Do I Need An Accountant For An Audit?

Kelowna accountantKelowna accountant Ken Davidson discusses when you need an accountant when being audited by Revenue Canada.

If Revenue Canada (CRA) has decided to audit you, you should definitely be using your advisory team. If you are not experienced with accounting, you should not be going it alone. I’m not a contractor so I don’t go and build my own house, if you know what I mean.

Don’t fight your own battle when it comes to taxes and audits but there are some things to consider when making the right judgment. Sometimes the numbers don’t make sense to hire a tax advisor or your local Kelowna accountant to handle the situation.

The number might be a small enough number that you might acknowledge the fact that hiring a local Kelowna accountant or lawyer would cost more money than just paying the taxes. If that’s the case, send them the documentation they request and if there is a tax bill, just pay it.

Related: BC Small Business Guide To Being Audited

Sometimes I advise our clients that it doesn’t make sense to have us deal with CRA on their behalf as they could end up owing more for accounting services than if they would have just paid the taxes in the first place.

Occasionally you will hear about people in courts claiming they aren’t guilty but they still end up settling. The simple reason is that in those cases they determined it was cheaper to settle than to go to court, so you have to pick your battles.

The same scenario applies with Revenue Canada. Is it cheaper to settle or go to court?

Use Available Resources

Revenue Canada has excellent resources to help you through the process. They have people you can call, online information and support. There is nothing wrong with using their resources to accomplish your goal.

The problem that you face is deciding how much time and energy you’re going to put in to fight. Are you going to let an expert handle it or are you going to try and handle it on your own?  Ask your Kelowna accountant or local advisor what he or she recommends with your particular case and the amount of money that is at stake and decide accordingly.  Just like any business decision, you need to weigh the costs against the benefits and choose accordingly.

Related: How To Prevent Yourself From Getting Nailed With A Big Tax Bill

What do you find most confusing about the auditing process? Have you ever used an accountant when being audited? Leave a message in the comments below!


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