Nobody Is Safe From The Taxman

If you own a small or medium sized business and have made sure that you have accurately filled up your returns and applied the law properly, it does not necessarily mean that you will not require an insurance against tax investigation. CRA chooses taxpayers at random which may require audit protection insurance depending on the likelihood of being investigated and the complexity of proving your compliance.

Canadians who have experienced receiving an envelope bearing the logo of Canada Revenue Agency will tell you that their heart skipped a beat before opening the envelope and reading the message it contains. The message can be a notice of audit or re-assessment or it can be good news that your tax returns have been accepted and you do not owe any taxes.

It is basic instinct for people not only Canadians to be afraid of the taxman. Perhaps, they have made an error in filing out the previous tax return and now the inadvertent mistake is haunting them. However, there is really reason to be afraid because even the most conscientious employee who pays his taxes on time and diligently fills out the form stands in danger of the taxman’s scrutiny. Once CRA turns its eyes on you, it is as if you are guilty of cheating. You have to prove that you have complied with the tax laws to the best of your ability.

Majority of Canadians have accepted the heavy burden of taxation because it is a social responsibility. They believe that all Canadians are paying their taxes on time and only those who cheat, the tax evaders and the non-payers should be afraid of the CRA. However, if there is misrepresentation or evidence of fraud in your tax return, the taxman will run after you. The taxman has the power to seize your assets and register a lien against real property.

If you think that there is chance that you will be audited this year, your best option is the insurance against tax investigation because the professional fees of an accountant can be extremely high in proving your compliance. The insurance will be offered through your accountant, grab it.