Blachford Tax Law reposted this
What is a Net Worth Audit? The CRA has many tools available to it to help it audit taxpayers. The goal with all is to determine the taxpayer’s income so that the CRA can impose tax appropriately. NWAs approach this goal a little differently. Unlike typical audits where the CRA relies on taxpayer-provided info to determine income, NWAs use a bottom-up approach: the CRA looks to the taxpayer’s change in financial circumstance over a period of time and works backwards to determine how much income the taxpayer must have made to achieve that change in circumstance. Seems like a pretty shaky way to determine income, doesn’t it? It is, but the courts have upheld CRA’s right to use this methodology. 💡Blachford Tax Law has officially declared November to be Net Worth Audit Awareness Month. We’re sharing one nugget of knowledge each business day throughout the month to help CPAs help their clients avoid or refute NWAs. Please comment on these posts to share your thoughts and questions. For more information and resources on NWAs, click here: https://lnkd.in/exF7bthV I’m tagging some tax professionals I respect to get the word out as much as possible: Ali Spinner, Yoni Moussadji Brandon Siegal James Rhodes Ben Grant Ian Pryor Kenneth Keung Adam Friedlan Cherry Chan,