For many individuals, dealing with tax issues is incredibly stressful. This stress gets worse the more complicated the tax issue becomes. Consequently, audits can feel like the worst-case scenario. Thankfully, net worth audits are a lot more commonplace and a lot less scary than they sound. While any type of audit is understandably a bit nerve-wracking, knowing what to expect from a net worth audit in Toronto, Ontario can make the whole process easier. Taking the following steps will help you get off to an excellent start.
Step #1: Contact A Tax Professional
Individuals should never attempt to deal with an audit on their own. There are many complex and detailed tax rules involved in handling a net worth audit. Only skilled tax experts should be consulted.
Step #2: Gather Documentation
When you speak with your tax professional, ask about the type of documentation required. Even if this information is spelled out in your audit letter, it is still a good idea to double check with tax experts. It never hurts to get as much clarification as you possibly can to comply with the audit requirements. At a bare minimum, you will need past tax returns, copies of all sources of income, and copies of deductible expenses.
Step #3: Don’t Panic
The best way to deal with a net worth audit is to be transparent and compliant. Be sure your tax advisor is included in all correspondence and conversations with the auditor. Certain tax information can be confusing. Keeping your advisor included and up to date on relevant correspondence will ensure you understand the requirements and documentation needed. Tax advisors are also in a better position to question government findings if there is a calculation or tax law error. Hiring a tax expert you can trust can make the whole ordeal much more bearable.
If you are facing a net worth audit in Toronto, Ontario, contact The Taxperts Group to learn about your rights and obligations.
