Tax Audits & How They Are Changing with Anna Malazhavaya | E081

Today’s guest is Anna Malazhavaya, a tax lawyer and Advotax Law Professional Corp founder. Anna is an expert in dealing with problems involving audits. Jason and Anna are going to talk about what it means to go through an audit and what the reality of it is.

Episode Highlights:

·  You don’t need to be doing something wrong to be selected for an audit or free audit to go up really bad.

·  The CRA has upped their game in the last three or four years. They got a lot of money for it, and we see that money working.

·  Typically, in the first step for audit, you will get a brown envelope that nobody likes to receive in their mailbox, and it will identify what they are looking for.

·  Audits start with an auditor’s letter introducing him or herself as telling a taxpayer that they are being audited. This is the period we’re looking at, and these are the questions we will have for you.

·  Many software and resources are available for managing your financial information. Using those, the more prepared you are and the easier it is for you to survive the audit.

·  Communication is key, and auditors have a lot of power. We get to dispute their decision later, but it’s going to cost you a lot of time and money, and it’s not fun to do.

·  If you did something wrong, you’re accountable. But auditors not going to be a big brother on every transaction we ever have because that’s not how they’re supposed to operate.

·  At the end of the day, it’s meant to catch the bad guys, but at the expense of our privacy and expenses, CRA always has an opportunity to start a fishing expedition for every audit they do.

·  Explanatory notes to the new rules say that we have broadened the scope to provide the new realities with the digital world.

·  Auditors used to interview neighbors before in their defense, but the neighbors had the right to say no, we are not interested, and we’re not talking to you.

3 Key Points:

1. Computers don’t know that you are a good and honest person. Computers may pick you up for an audit, and you will be caught, and you will have to go through the not very pleasant exercise together with people who did something wrong.

2. Jason and Anna discuss that are the best practices for surviving an audit, and what other pieces of advice she would give to the listeners.

3. Auditors get to inspect personal documents or documents of any other person if they relate to a targeted person or his tax liability.

Tweetable Quotes

·  “It’s funny the level of disdain and contempt some people have for the nation’s tax authority and thinking that they are not very smart people.” - Jason

·  “There are chances that you may not need to provide everything they ask for, which can help you in the future.” - Anna

·  “I think the audit in the future will be more effective, faster, and more accurate, but it’s going to be invasive.” – Anna

Resources Mentioned

·  Facebook – Jason Pereira’s Facebook

·  LinkedIn – Jason Pereira’s LinkedIn

·  Anna: Website | Linkedin

Full Transcript

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