CRA Auditing Activity Of Businesses Has Dramatically Increased

October 19, 2022
CRA Auditing Activity Of Businesses Has Dramatically Increased

It looks like the CRA has increased the level of audit activity on businesses dramatically.

They are on a fishing trip to try to find non-compliance (cellphones are low hanging fruit in Canada given the ubiquitous level of non-compliance) as evidenced by :

This year we have seen unprecedented numbers of T1 processing reviews and Corporate Post Assessment reviews. And of the many thousands we have seen, CRA adjusted less than 5%. That means there is an awful lot of nuisance CRA reviews happening.”

It’s one of the reasons we were invited to speak on this topic by Video Tax News (one Canada’s largest and oldest Tax Training firms) as they were seeing this increase in audit activity last year (video shot in February 2022) :

We are already seeing the CRA go after the “taxable benefit associated with personal usage of a corporate provided asset.” A company provided phone and plan is a corporate asset, and the low hanging fruit of a taxable benefit audit and HST audit is clearly spelled out here :

If I’m a CRA auditor this is very easy pickings to make my quota (yes CRA auditors have targets that they need to hit.)

We’ve already shown global OECD tax coordination starting before the pandemic on going after the taxable benefit of a company provided Smartphone and plan. We spoke on this topic at Collision In 2019 :

The development is not a surprise given the level of audit activity globally that we are seeing and the increased investment tax authorities are putting in their Taxation & Audit departments. The evidence is most stark in the USA where :

  1. The Likelihood Of IRS Audit To Double For The Average American :
  2. IRS To Hire 87,000 Auditors Targeting Self Employed & Small Business Owners :
  3. 80% Of New IRS Revenue Will Come From Small Businesses Earning Under $200,000 : 6977631751296753664/

Our Interview With Video Tax News On The Increase In Audit Activity They & Their Network Were Seeing

Changed Smartphone Tax Deductions For Gig Workers, Side Hustlers & Self Employed (True For Incorporated Companies As Well) :

Time Machine Protects You For Years In The Past By Providing The Documentation & Cost

Canadian Employee Work From Home Tax Deduction For Smartphones

CRA Has Gig Workers & Side Hustlers As A Target Group For Increased Audit Activity

Get Up To A $1,000 Tax Deduction For The Business Usage Of Your Personal Smartphone

We Were Invited To Speak In May Of 2019 At Collision In Toronto On The Global OECD Tax Coordination On Smartphones

Our Mobile Cost Management (MCM) Solution :

  1. 70% More cost effective than a Stipend for Smartphone Reimbursement
  2. 75% More cost effective than a Company provided phone
  3. Keeps companies labour law and tax law compliant
  4. Protects companies against class action lawsuits by their employees for failure to reimburse or adequately reimburse
  5. Keeps employees reimbursed & happy in a tax efficient lower cost way than a stipend or company provided phone
  6. Aligns your smartphone reimbursement policy to your mileage reimbursement policy. Tax authorities globally have required a mileage book for years and now require a "mileage book for connectivity costs" denoting the business vs. personal usage & cost

30 Second Explainer Videos On How We Lower Costs For Employees/Gig Workers & Employers :

Employee WFH / BYOD Reimbursement :
Employer WFH / BYOD Cost Savings :

Employee & Employer Cost Sharing For Win/Win :
Carrying 2 Phones? Save $1,500 Annually On Cell Bills :

Tax Deduction Changes For US Gig Workers :
Tax Deduction Changes For Canadian Gig Workers :
Tax Deduction Changes For Australian Gig Workers :

Gig Worker & Employee Tax Deduction/Reimbursement For Previous Years :
Canadian Employee Tax Deduction Up To $1,000 :

Non-Canadian Employee & Gig Worker tax deduction :

Get $30 to $80 / Month Tax Free In The Form Of Reimbursement Or Tax Deduction :

Smartphone global tax trends :

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