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Proof you don't have to give CRA original documents
So I have written a few blogs that discuss receipts and documentation. In every one I have said, “never, never, ever send the CRA original documentation”. As an auditor I reviewed lots of documents, and never demanded originals. I would ask for originals if the copies were hard to read and relevant, but most of the time copies were more than adequate. Recently I have encountered CRA personnel who emphatically insist that I or my clients MUST provide original documents and that copies are not acceptable. So I perused the CRA website and the Income Tax Act looking for ammunition with which to defend my clients. I was unable to find anything that I could throw back at the auditors saying photocopies are acceptable. This, to say the least, was very discouraging. Then I used my head and talked to some friends at CRA. One astute individual said “why don’t you check the audit manual”. Now, being smarter than the average bear, I made sure to keep a copy before I left the CRA. Guess what? Here is what the audit manual says about documentation.
10.5.4 Direct Evidence — Documentary
Direct evidence may be documentary such as a letter written by the accused containing a statement that the return was false. Documentary evidence may be primary — the original document, or secondary — a copy of the testimony of a witness who has read the document. Generally it is considered stronger than oral evidence. It is, for example, often prepared by or with the involvement of relatively disinterested parties including customers, suppliers and employees.
Copies of documents are usually considered acceptable; however, if there is any doubt about a document's authenticity, the original should be obtained.
It is always easier to argue with the CRA if you have legislation or something in writing. It is even better if you can quote the CRA’s own audit manual. I don’t usually tell auditors and staff that I worked for the CRA, because I like to keep that card in my back pocket until I need it. I like to see what type of person I am dealing with. You learn way more about people when they think that they hold all the cards (or at least all the aces). This is going to be one of those times. From now on when they ask for originals I am going to ask why photocopies aren’t good enough, just to see what they say. Then when they are done BS’ing me I am going to say “hmmm, that’s funny, the audit manual says …. In section 10.5.4”. I guess photocopies will be ok (the joker always beats aces, <insert maniacal laugh here>).