Tax Audit Process

We carry out two complementary types of tax audits:

  • remote audits, conducted in our offices, and
  • in-person audits, conducted in your offices

Note that an auditor contacting you does not necessarily mean that you have failed to meet your fiscal obligations.

Every auditor is required to follow procedure if he or she decides to conduct an audit in your offices. There are several steps to such an audit.

Before the audit

  • An auditor will contact you, introduce him or herself and explain the reasons for the audit, as well as the purpose of the audit.
  • The auditor will tell you which years or periods are covered by the audit in the prescribed period.
  • The auditor will request the information and documents he or she needs to carry out the audit. He or she may use your electronic files.
  • The auditor will schedule a meeting with you, then confirm the date in writing.
  • Finally, the auditor will give you his or her contact information, as well as that of his or her head of service (office address, telephone number, secure email address).

During the audit

  • The auditor will inform you of your rights and obligations, and give you brochure COM-366-V, Your Rights and Obligations During a Tax Audit.
  • The auditor will give you an estimated timeframe for the audit.
  • The auditor will list the items to be examined and will make sure you understand the weight and scope of the audit.
  • The auditor will keep you informed of the progress of the audit and will notify you
    • if the audit must be extended, or
    • if the audit can be terminated where no irregularities have been found.
  • The auditor will complete the audit as quickly as possible.

After the audit

  • If applicable, the auditor will issue you a draft assessment and any complementary documents for discussion purposes. He or she will then explain the proposed amendments and answer any questions you may have.
  • You will be given 21 days to respond to the draft assessment, after which the auditor will examine your comments and explain the rest of the process.
    • If your files are in order, the audit will be terminated and no amounts will be recovered.
    • If the auditor maintains the draft assessment in whole or in part, the necessary adjustments will be made (including any refunds).
  • The auditor will notify you that the file will be closed. If he or she discovered any anomalies, recommendations will be made regarding changes to be made in the future.
  • The auditor will give you information about any recourse available to you.
Important

Auditors are people who have been authorized by the Minister to carry out the powers and duties that come with audits and examinations provided for in the Tax Administration Act. They are also authorized by the Minister to carry out the powers and duties that come with audits, examinations and inspections provided for under the Excise Tax Act and the Tax Administration Act.

Upon request, auditors must introduce themselves and produce a document signed by the Minister attesting their authority.

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