Last month, some taxpayers began receiving correspondence from CRA regarding verification activities of their CEWS claims.
None of our clients have received any such correspondence from CRA. If and when such a letter is received by any of our clients then we will handle the situation accordingly. This will likely begin by contacting the auditor to discuss whether a reduced listing of information can be provided. If the auditor is unwilling to reduce the information request then we will refer them to the CRA quotesindicating that the requests should be tailored and reduced information should be appropriate.
- One case started with a phone call followed by a nine-page request for information to be provided within 10 days
- The requests are consistent with CRA’s communications of their plans
- It appears CRA is looking to establish:
- How the relevant revenues were determined and what kind of business was conducted;
- How the relevant wages were determined;
- What other benefits (e.g., temporary wage subsidy and EI worksharing benefit) were received that should reduce CEWS claims;
- Whether the appropriate person filed the claim and the appropriate approval process was in place;
- Details of elections made; and
- Confirmation that special situations/cases were dealt with appropriately.
- The letters request a significant amount of information. Some requests were not surprising (e.g., monthly sales reports, payroll records and reconciliations) but some requests could take a significant amount of time to compile and seem unnecessary (e.g., corporate minute books, organizational charts, two years of bank statements and employment contracts).
Should you have any questions or feedback, please reach out to myself or the team. As always, we are here to help and support you.