CHARITIES AUDITS: DEALING WITH THE CRA
Any taxpayer can be audited. With certain taxpayers or certain
types of taxpayers it happens often. For large businesses or high
net worth individuals it is a fact of life. Registered charities
are also a type of taxpayer that is disproportionately audited, but
a charity audit usually feels very different from a business
audit.
For other taxpayers, the fight is usually about income or
expenses. Maybe an item is income or capital. Maybe an expense is
deductible or not. In most cases, a significant amount of tax is
being paid and disputes are typically on the margins. With
registered charities, which do not pay Part I tax, the dispute is
more typically about compliance and principles, rather than
counting and methodology. Instead of numbers on the margins, the
stakes are often existential for the charity.
