Ravinder Makkar CPA assist you in Tax Audits

Unreported worldwide income An individual’s residency status is critical in establishing their Canadian tax liability and the tax treatment of the individual’s worldwide income. Residency status should not be confused with citizenship. For example, a citizen of a country other than Canada who has significant residential ties in Canada may be deemed to be a resident of Canada. Residents of Canada have to report their worldwide income to the CRA. Non-residents only have to repo...rt their Canadian-source income, unless a tax treaty provides otherwise. An individual’s residency status is therefore essential in determining what income must be reported. An individual’s residency status is determined on a case-by-case basis in light of many facts. These include residential ties in Canada, purpose and duration of visits outside Canada, social and economic ties outside of Canada. Ravinder Makkar Chartered Professional Accountant 905-791-6666 * The above information is general information, does not apply to all client situations and is situation specific

Change in use of Principal Residence You can be considered to have sold all or part of your property even though you did not actually sell it. For example, this is the case when:... you change all or part of your principal residence to a rental property; you change your rental property to a principal residence; or you stop using a property to earn or produce income. Every time you change the use of a property, you are considered to have sold the property at its fair market value and to have immediately reacquired the property for the same fair market value, unless you make an election. The resulting capital gain or capital loss (in certain situations) must be reported in the year the change of use occurs. If the property was your principal residence for any year you owned it before you changed its use, you do not have to pay tax on any gain that relates to those years. You only have to report the gain that relates to the years your home was not your principal residence. Ravinder Makkar Chartered Professional Accountant 905-791-6666 * The above information is general information, does not apply to all client situations and is situation specific.

CRA Audit Triggers Canada Revenue Agency (CRA) has drastically increased audits of small- to medium-sized enterprises. In selecting taxpayers for audit, CRA will often pay closer attention to cash businesses such as retail shops, construction and restaurants, businesses where receipts may not be needed, and businesses whose margins of incomes are not within the norm for that industry. CRA will also look more closely at taxpayers who claim rental or business losses.... Audit projects: Then there are CRA audit projects. At various times, CRA will target certain groups or industries that tend to have a high level of tax non-compliance, such as construction, real estate or hospitality industries. Secondary review: In other cases, CRA may conduct a secondary review. That's when CRA audits a spouse, investor, supplier or subsidiary of an individual or company on which it is already doing a main audit. Another Major Factors in a Tax Audit: Failure to remit source deductions for employees, such as Tax, CPP and EI, on a regular basis or failing to pay your HST correctly and on time could also lead to an audit. Ravinder Makkar Chartered Professional Accountant 905-791-6666 We professionally assist in following types of Audits: *Corporate tax *HST *Payroll *Networth *WSIB *Business income v/s Capital gain * Asset Verification, etc * The above information is general information, does not apply to all client situations and is situation specific.