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Chances of audit

ec15

Full Member
Jan 19, 2019
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I want to get my NOA as soon as possible (for parent's super-visa and other things). However, I am worried whether my tax return might go into audit and so NOA might take very long time.

I moved from U.S. to B.C., Canada in mid-2018. Then after few months, my employer moved me from B.C. to Quebec. Also, even after moving to Canada, I had regular (stock) income from U.S. (through my employer stock plan).

I think my Canadian tax return might be complicated, and hence higher chances of audit because:

a) I would be part-year resident
b) I worked in two provinces (B.C. and Quebec)
c) I would probably be claiming moving expenses (as I moved for work)
d) I had significant foreign income after becoming Canadian tax resident (and would be claiming foreign tax credit)
e) I contributed (~2k) to RRSP

Questions:
1) Would the NOA be delayed in case my tax return is audited?

2) Does it take longer to process tax-returns of part-year residents?

3) Is there anything I can do to reduce the chances of audit? Should I consider not claiming moving expenses to keep tax-return simple?

Any suggestions/opinions are welcome.
 

scylla

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I want to get my NOA as soon as possible (for parent's super-visa and other things). However, I am worried whether my tax return might go into audit and so NOA might take very long time.

I moved from U.S. to B.C., Canada in mid-2018. Then after few months, my employer moved me from B.C. to Quebec. Also, even after moving to Canada, I had regular (stock) income from U.S. (through my employer stock plan).

I think my Canadian tax return might be complicated, and hence higher chances of audit because:

a) I would be part-year resident
b) I worked in two provinces (B.C. and Quebec)
c) I would probably be claiming moving expenses (as I moved for work)
d) I had significant foreign income after becoming Canadian tax resident (and would be claiming foreign tax credit)
e) I contributed (~2k) to RRSP

Questions:
1) Would the NOA be delayed in case my tax return is audited?

2) Does it take longer to process tax-returns of part-year residents?

3) Is there anything I can do to reduce the chances of audit? Should I consider not claiming moving expenses to keep tax-return simple?

Any suggestions/opinions are welcome.
FYI - you most likely won't be able to claim the moving expenses. Rules with regards to that have changed for 2018. Some recommended reading:

https://www.hrblock.com/tax-center/irs/tax-reform/tax-reform-moving-expenses/

https://www.mcggroup.com/tcja-changes-tax-deductions-moving-costs/
 

ec15

Full Member
Jan 19, 2019
42
0
FYI - you most likely won't be able to claim the moving expenses. Rules with regards to that have changed for 2018. Some recommended reading:

https://www.hrblock.com/tax-center/irs/tax-reform/tax-reform-moving-expenses/

https://www.mcggroup.com/tcja-changes-tax-deductions-moving-costs/
These links seems to be for U.S.. My question is only about Canadian tax return.

My main concern is that I need NOA for immigration purposes (e.g.: parent's super-visa https://www.canadavisa.com/canada-immigration-discussion-board/threads/super-visa-without-noa-moved-from-u-s.607147/), and so I don't want NOA to be delayed.
 

canuck78

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Jun 18, 2017
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Given that IRCC will expect such a complicated NOA to only be available in April/May I think it could also raise red flags that you are not submitting your true NOA. For a few months you are taking quite a lot of risks.
 

mad_hatter

Hero Member
Jul 16, 2016
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I don't think your NOA will be delayed.

Firstly, your return is not that complicated. Many Canadian own US stocks, therefore claiming foreign tax credits are very common. As long as the tax credit claimed is in proportion to the foreign income received. Worked in two provinces is also not a problem. Your provincial tax residency depends on where you reside at the end of the year, in your case Quebec. The only question is the moving expense. If your employer paid for your move, you cannot claim moving expenses.

Secondly, even if CRA decided to audit you, it will not happen for many months. If CRA found problems, it will issue a Notice of Re-assessment.
 

deadbird

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Jan 9, 2016
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I want to get my NOA as soon as possible (for parent's super-visa and other things). However, I am worried whether my tax return might go into audit and so NOA might take very long time.

I moved from U.S. to B.C., Canada in mid-2018. Then after few months, my employer moved me from B.C. to Quebec. Also, even after moving to Canada, I had regular (stock) income from U.S. (through my employer stock plan).

I think my Canadian tax return might be complicated, and hence higher chances of audit because:

a) I would be part-year resident
b) I worked in two provinces (B.C. and Quebec)
c) I would probably be claiming moving expenses (as I moved for work)
d) I had significant foreign income after becoming Canadian tax resident (and would be claiming foreign tax credit)
e) I contributed (~2k) to RRSP

Questions:
1) Would the NOA be delayed in case my tax return is audited?

2) Does it take longer to process tax-returns of part-year residents?

3) Is there anything I can do to reduce the chances of audit? Should I consider not claiming moving expenses to keep tax-return simple?

Any suggestions/opinions are welcome.
I am not a lawyer/ CPA, so take my advice with a grain of salt.
Seems like you have a good chance of getting an audit. I was told by my accountant that the CRA has gotten quite aggressive with audits especially when there are foreign tax credits involved. They do this the first year you file and chill out in subsequent years if nothing comes up. That said, I did get a NOA within a few weeks when I e-filed with the CRA. So maybe you can use that NOA even if it's under audit. I'm not sure though.
 

BC4life

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I want to get my NOA as soon as possible (for parent's super-visa and other things). However, I am worried whether my tax return might go into audit and so NOA might take very long time.

I moved from U.S. to B.C., Canada in mid-2018. Then after few months, my employer moved me from B.C. to Quebec. Also, even after moving to Canada, I had regular (stock) income from U.S. (through my employer stock plan).

I think my Canadian tax return might be complicated, and hence higher chances of audit because:

a) I would be part-year resident
b) I worked in two provinces (B.C. and Quebec)
c) I would probably be claiming moving expenses (as I moved for work)
d) I had significant foreign income after becoming Canadian tax resident (and would be claiming foreign tax credit)
e) I contributed (~2k) to RRSP

Questions:
1) Would the NOA be delayed in case my tax return is audited?

2) Does it take longer to process tax-returns of part-year residents?

3) Is there anything I can do to reduce the chances of audit? Should I consider not claiming moving expenses to keep tax-return simple?

Any suggestions/opinions are welcome.
My first question is, how did you contribute to RRSP if you moved to Canada in 2018? Were you previously a Canadian resident with RRSP room available? Because if you first became a resident in 2018 then your available room would be 0 and you would be charged penalties for over-contributing.

Trust me the CRA deals with thousands of much more complex cases than yours. It is not because you were part-year resident or moved between provinces that you automatically expose yourself to an audit. As long as you get your return done professionally and have all your receipts in place you should be good to go.

It also seems you did not have a clean departure from the US and continued to receive remuneration from your US employer. If you spent less than 183 days in Canada in 2018, you might want to get professional help or call the CRA hotline to determine your residency status for 2018.
 
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canuck78

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Jun 18, 2017
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Pretty sure OP means filing now versus waiting until all tax slip, etc. are available. At least that is how I interpreted the question. I'd wait until you have all your information to file if that is what you are asking.
 

steaky

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