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Tax Litigation

Feb 22, 2022

CRA with Faye - Why is CRA asking me for a document they already have?

I frequently receive this question from clients and lawyers facing a CRA audit. Typically it is followed by a second question: the auditor should already have it… shouldn’t they??!

These questions are always laden with frustration. Being audited is already time-consuming and unnerving. In a world where privacy is protected in most other contexts, audits can feel particularly invasive. To be asked for an already-filed return or form only adds to the irritation. Now the taxpayer must spend its own resources trying to source and produce that document. These requests can also exacerbate audit-related anxiety, leading to a third question: what could CRA possibly be looking for if they want to scrutinize a document they already have?! 

Here’s the answer. CRA is big. And when I say big, think HUGE. Huge as in there can be whole groups of people devoted to a line item on a particular trust tax return. And those people rarely if ever speak to the person who is peering into all your history and reporting relating to a year in which you filed taxes on that return. I can almost guarantee that Jill Auditor has never met Joe Line-Item and wouldn’t even know how to contact him/her/them. So the reason the audit department is requesting a document you already filed with the CRA is because, simply: a) they do not have it, and b) the easiest way to get it is to ask you.

This may not be a big revelation, but I hope it demystifies the audit process a little. By explaining the process, I aim to make audits a little less stressful and a little more amicable. In turn, this should help to bring you closer to the resolution you want.

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