A Lotto You Don’t Want to Win
January 17, 2017
Like most Canadians, you probably file a tax return. There are at least twenty-five million of us that do. And there’s roughly a one in ten chance that your return includes income from self-employment (per Industry Canada’s latest data, there were close to three million self-employed in 2011).
At this point, you’re likely thinking, so what?
Well, as it turns out, our good friends at CRA are interested in having a chat with, oh, about thirty thousand self-employed Canadians. And not just any self-employed Canadian either. No, the Canada Revenue Agency is planning on contacting the self-employed who, for one reason or another, seem unable to turn a profit.
And the way they’re contacting their target market is via something called an Office Letter Audit Campaign.
Just in case you have no self-employment income and you therefore think you’re off the hook, I’m afraid I’ve got slightly worse news. Because, in their campaign, CRA is also targeting individual taxpayers who claim losses from a rental property, and salaried employees who claim employment expenses. Which means anyone on commission or whose job includes travel expenses.
That’s a fairly wide net that CRA is casting.
Do the math though—thirty thousand audits VS almost thirty million taxpayers—and one comes to the conclusion that the odds of falling under CRA’s campaign are infinitesimal.
But what do you do? What do you do if your tax return does get selected?
My first suggestion is a simple one: don’t panic!
My second suggestion is to contact us. Contact us right away. And let’s have a chat. Let’s look at the tax return (or returns) under review and let’s see if they pass the stress test. For example: are your expenses eligible? Are they reasonable? Do you have receipts?
Those are just a few examples of our study.
And yes, even though the odds are small, they’re still much larger than the likelihood of winning the lotto. The major difference, of course, being that CRA’s is the one lotto you don’t want to win.
But, if your return does indeed get selected, the first thing you’ll need is some solid advice. That’s where we come in. So please, do get in touch.