The Tax Audit Part 4 - Initial Meeting

Do not be confrontational.  Be polite, be kind, be patient, and above all else stay calm.  Some auditors are actually very nice and caring, others not so much.  It is a crap shoot as to what you will get.  Forest Gump said “life is like a box of chocolates, you never know what you will get”, and that is especially true of auditors.  But even if you get the worst, stay positive and calm. 
If you haven’t gotten professional help now is a good time to do so.  A bad auditor will make your worst nightmare seem like a day at the beach.  Bad auditors do bad audits which result in extremely high and unfair tax bills.  I am not exaggerating.  I have seen the results first hand from friends in the accounting field who brought me their stories and sought my help to rectify the situation.
Do not be evasive.  Nothing upsets an auditor more than the belief that they are being lied to.  Nothing will make an auditor dig harder and further than the belief that they are being mislead.  That said some auditors believe everyone is lying when they are faced with an audit.  At this point you have to do your best and move forward.
Do your best to explain to the auditor how you conduct your business.  Explain to them what you do how you do it.  This is where professional help can be a real benefit.  It is not what you say but how you say it that can make all the difference.  There are certain buzz words and phrases that can mean the difference between an expense being allowed or disallowed.
Try to get a commitment from the auditor as to how long the audit will take.  Ask them if they have much work currently in progress.  Let them know that you want to co-operate and get the audit completed as quickly as possible.
If you are one of those individuals that does not like to have things hanging over your head this is where a representative can be really handy.  CRA auditors are supposed to conduct business out of the office.  If your representative has an office you can tell the auditor that they can conduct it at your representatives’ office.  This will cost you some fees, but the upside is that you retain total control of all documents, the auditor has access to someone who understands accounting and tax and hopefully your individual records, and they don’t have the luxury of working on other things.  They have to do their audit work and make their decisions within a relatively short time frame.  This means you will know the outcome sooner, and be able to move forward without wondering what is going to happen.  If you are going to have the audit conducted at your or your representative’s office make sure you do not bring your documents to the initial meeting.