You need a tax lawyer if you’ve been audited, subpoenaed or have a tax bill.
It is not uncommon for any of those things to happen when you are considering how to structure or transfer a business. When it does, it will be easy to assume that you are facing a legal battle, that you are going to lose everything and need to go to the best tax lawyer in Toronto.
However, in fact the audit is just the first stage. The next stage is likely to be an official tax assessment from the CRA, either in the form of a formal notice of deficiency (a “Notice”), or even a formal assessment.
Both of these assessments can be made within a few days. The assessment will start the administrative appeals process. The “Notice” will be a formal demand for information from the CRA, but it will be an informal request for information. If the information is provided, they will be working their way through the process of the tax assessment process, or if not provided, will issue a formal demand for it.
If you are thinking of transferring a business, and not certain about how to tax it, the next step after the audit will be to make sure you have all the tax issues clear. So if you don’t have a good tax lawyer, you won’t need one when they start the process.
However, you should consider how you would pay for the audit. If you were to have the lawyer working on the audit for the purpose of preparing the administrative appeals, and you have any outstanding tax bills, the lawyer will also do the preparation for those. That will mean the entire cost of that would come from your own account, not out of any tax refund. If you were to go to an independent tax professional, it would be a different story.
If you can provide the payment for the audit from your own accounts, then you won’t need to rely on any tax refund to pay for it. And if you wait too long, the tax refund might be significantly reduced, or perhaps, not even issued.
This article may help you decide if the extra money to pay for the audit is worthwhile.
Taxpayer Advocate Service Canada
The National Revenue Agency is the taxpayer advocate for Canadians in dealings with the tax office. If you are having a difficult time with an interaction with the tax office, and if you are the taxpayer, you might want to consider first contacting the taxpayer advocate.
The taxpayer advocate works with the Tax Court, and is independent of the CRA. He provides a level of appeal with the tax office that is above the level of the tax court, but is closer to the levels of the Canadian court system. The taxpayer advocate investigates issues with the CRA, and determines whether the CRA is treating the taxpayer unfairly. If he can establish that the taxpayer has been treated unfairly, he can provide a recommendation that CRA respond by a certain date. If the taxpayer feels that he is not being treated fairly, he can seek to have a hearing in the Tax Court.
If you are the taxpayer, contact the taxpayer advocate to see if you can have a hearing in the tax court.
If you are an employer, and you think you are being treated unfairly by the CRA, contact your auditor. He should be able to tell you whether your accounts are up to date and compliant, and, if not, what action you need to take.
If you are a business owner who wants to understand how an audit works, why you might want to have a professional auditor come in, and what they will do during an audit, you might want to read this article by the Canadian Payroll Association.
For more details about how tax attorneys could assist with your tax debts, call (888)489-4889 for a free consultation.