In any self-reporting or honour system like we have in Canadian
taxation, there must be a means by which the state can verify the
correctness of information provided. Enter the tax audit – a
component of such a system, which is both necessary to encourage
taxpayer honesty by deterring cheating, and necessary to uncover
inadvertent errors. And one could argue that the first and prime
goal of the audit should always be to arrive at the correct
outcome; to find the correct amount of tax payable – even if
it means making an adjustment in the taxpayer's favour.
In such a system, it should be obvious that auditors
shouldn't have reassessments as their primary motivator –
a conclusion which seems to not have been arrived at by the Canada
Revenue Agency. And the audit process itself definitely should not
be adversarial. After all, the CRA refers to taxpayers as their
"valued clients."
