The CRA Audit Experts

Facing a CRA 
Net Worth Audit?
Get Expert Help Now

Clear Strategies. Experienced Representation. We Deliver a Professional Response That Protects Your Interests.

Protect  Your Financial Future During a CRA Net Worth Audit

CRA net worth audits can get extremely in-depth and hard to challenge without the right help. We help you uncover discrepancies, strengthen your records, and advocate for a fair outcome before the CRA finalizes their assessment.

Understanding CRA Net Worth Audits

What You Need to Know About Net Worth Audits and Why Itโ€™s Important

A CRA net worth audit is an in-depth review where the Canada Revenue Agency tries to determine if your reported income matches your lifestyle and accumulated assets. Instead of relying solely on the information in your tax returns, the CRA reconstructs your financial picture by calculating the difference between your assets and liabilities over a period of time. If the math suggests you spent or saved more than you earned, they may conclude that some income went unreported.

Net worth audits usually happen when the CRA sees warning signs that trigger further investigation. Sometimes itโ€™s a sharp increase in assets that doesnโ€™t line up with your declared income. Other times, it could be irregular banking activity, inconsistent tax filings, or information shared by third parties that raises concerns. Being in certain industries where cash transactions are common, like hospitality, construction, or retail, can also put you under closer scrutiny, even if you are fully compliant.

The trigger point is often subtle. It might be a lifestyle that seems out of proportion to the income you reported. It might be data analytics that flag a taxpayer as an outlier compared to others with a similar financial profile. In some cases, it begins with an unrelated audit, such as that of an employer or a spouse, and expands outward.

Understanding why net worth audits happen is crucial because theyโ€™re different from a typical document review. These audits involve a detailed examination of your financial affairs, including personal spending habits, asset acquisitions, debts, and even loans from family members. When the CRA uses net worth methodology, they are effectively treating unexplained increases in your wealth as undeclared income unless you can clearly show otherwise.

Responding to a net worth audit takes careful organization, a clear understanding of how the calculations work, and professional support. The sooner you understand how your financial picture might be interpreted, the better prepared you are to deal with the process.

How CRA Net Worth Audits Work

Learn the General Steps & Procedures Involved in a CRA Net Worth Audit

A net worth audit is one of the ways the CRA tests whether your reported income makes sense compared to your actual financial position. Rather than focusing on a single tax return, the CRA examines your entire economic situation, including assets, debts, spending habits, and any unexplained increases in wealth over a certain period.

The process typically starts with a letter from the CRA letting you know that a review is underway. This letter outlines the years under audit and often requests a detailed list of your assets and liabilities. Bank accounts, real estate holdings, investment portfolios, loans, credit card balances, and even personal property like vehicles or valuable collectibles come under scrutiny.โ€จโ€จOnce you respond, the CRA moves into the information-gathering stage. They analyze your reported income against changes in your net worth year-over-year. If your wealth grows significantly but your declared income does not explain that growth, the CRA may conclude that there is unreported income. In their view, inconsistencies between lifestyle and income create red flags that require deeper explanation.

Throughout the audit, you will be asked to provide supporting documents. These might include bank statements, mortgage documents, loan applications, credit reports, business financial records, and receipts for major purchases. If you own a business, the CRA may also look closely at your corporate financials and personal withdrawals to understand how money moves between personal and business accounts.โ€จโ€จAfter reviewing all documentation, the auditor prepares a Net Worth Statement. This is a formal breakdown showing assets, liabilities, income, and expenses over the period in question. Based on this analysis, the CRA will propose adjustments to your reported income if they find discrepancies. You will have an opportunity to respond, provide additional explanations, or challenge any findings before the audit closes. However, it can be extremely difficult to change the CRAโ€™s mind on your own.
If the audit results in an income adjustment, it often leads to additional taxes owing, plus interest, and sometimes penalties. In more serious cases, the CRA may assess gross negligence penalties or even refer the case for criminal investigation.

The key during a net worth audit is knowledge of your rights, preparation, and transparency. Getting expert help early can make a substantial difference in how smoothly the process unfolds and how favourable the outcome is.

Contact us for CRA Audit Help Today

CONTACT US

Net Worth Audit Appeals & Disputes

Know Your Options & Steps Available for Appealingโ€จ or Disputing CRA Net Worth Findings

If the CRAโ€™s net worth audit has left you facing an unfair tax assessment, you have the right to appeal or dispute the findings. A net worth audit estimates your income based on your assets and liabilities, but these calculations are not always accurate. When the CRA's assumptions do not reflect your reality, it is crucial to act quickly and strategically.

The first step is to file a formal Notice of Objection for disputes that canโ€™t be easily resolved. This is a written statement that explains why you disagree with the assessment, backed by evidence such as financial records, valuations, and supporting documentation. Timing matters. You have 90 days from the date of the assessment to file your objection.โ€จโ€จOnce your Notice of Objection is filed, the CRAโ€™s Appeals Division will review your case. This stage often involves providing additional documents, clarifying misunderstandings, and negotiating with the appeals officer. If the issue is resolved at this level, the reassessment can be adjusted or even cancelled without the need for further action.ย 

Getting your objection accepted reduces your tax bill and saves you from having to go through the costly and complicated appeals process to protect your rights. Thatโ€™s why professional support from the Tax Audit Help team with your Notice of Objection is essential.

If the CRA upholds the original findings after the objection process, the next step is to escalate the matter โ€จto the Tax Court of Canada.ย 

Throughout the appeals and disputes process, working with our tax professionals helps ensure your case is organized, your evidence is thorough, and your arguments are framed in the strongest possible way to avoid having to go to court.

If youโ€™re considering disputing a net worth audit, donโ€™t navigate it alone. Proper advice early on gives you the best chance of a successful outcome.

Frequently Asked Net Worth Audit Questions

Answers to Common Questions & Concerns Regarding CRA Net Worth Audits

When a taxpayer finds themselves facing a CRA net worth audit, the uncertainty often feels as overwhelming as the audit itself. Understanding how the Canada Revenue Agency approaches these reviews can ease some of the anxiety. Here are some of the most common questions and concerns people have when dealing with a net worth audit.

Net worth audits help the CRA identify whether a taxpayerโ€™s reported income aligns with their financial reality. If someoneโ€™s assets, liabilities, and lifestyle do not match the income they've reported on tax returns, the CRA may see that as a red flag for underreported income. A net worth audit becomes their method of reconstructing a financial picture to verify or challenge a taxpayer's filings.

Yes. During a net worth audit, the CRA has the authority to estimate your income based on available information. They start by calculating the difference in your net worth over a certain period. If the increase appears larger than what your reported income can explain, they assume the excess came from unreported sources. While the methodology is allowed under the Income Tax Act, it is not immune to errors, which is why professional support is critical during the audit process.

Expect the CRA to request a broad range of documents, including but not limited to bank statements, credit card statements, mortgage and loan documents, investment account records, business financials, and even personal items like vehicle registrations and property deeds. They will also ask about your living expenses, such as groceries, utilities, insurance, education costs, and travel. The goal is to develop a complete profile of both your assets and spending habits.

The CRA does not need your permission to obtain information from third parties, including banks, employers, and financial institutions. They can issue a Requirement for Information to these entities without notifying you first. However, auditors often begin by requesting the information from you voluntarily before taking formal steps.

Generally, the CRA can reassess tax returns up to three years after the original notice of assessment. However, if they suspect gross negligence or fraud, they can go back even further; sometimes ten years or more. In a net worth audit, allegations of misrepresentation or deliberate omission are not uncommon, so it is important to take the audit seriously from the start.

You have the right to challenge the CRAโ€™s conclusions. If you believe their calculations are wrong, whether due to missing information, misinterpretation of transactions, or incorrect assumptions, you can provide clarifications or additional documentation. If disagreements persist, you can file a formal Notice of Objection, beginning the appeal process. Having a professional advocate at this stage improves your chances of resolving issues in your favour.

Penalties are a real risk. If the CRA concludes that you deliberately underreported income, they may impose gross negligence penalties, which can amount to 50% of the understated tax. Even if mistakes were unintentional, the CRA can still assess interest charges on any outstanding amounts. Full transparency, good record-keeping, and strong representation can help you avoid these consequences.

Why You Need Expert Help with a CRA Net Worth Audit

These are Just a Few of the Benefits of Having the Tax Audit Help โ€จTeam Represent You if the CRA is Auditing Your Net Worth

When the Canada Revenue Agency conducts a net worth audit, it can feel like every part of your financial life is under a microscope. These audits are complex, often invasive, and carry serious financial consequences if not handled properly. Expert guidance is not just helpful, but essential.

Sam Faris, CPA, and the Tax Audit Help team specialize in defending individuals and businesses during CRA net worth audits. We do more than just prepare paperwork. We step in immediately to protect your rights, manage communication with the CRA, and challenge any assumptions that do not accurately reflect your financial situation. Net worth audits are based on estimates and projections. Without professional representation, errors or misinterpretations can quickly lead to inflated tax assessments, penalties, and interest charges.

Working with us ensures that your case is approached with deep technical expertise and strategic insight. We meticulously review the CRAโ€™s calculations, identify discrepancies, and build strong, evidence-based responses. Our team knows what the CRA looks for and what they overlook. We push back where necessary and negotiate on your behalf to achieve a fair and accurate outcome.

With Sam Faris and the Tax Audit Help team in your corner, youโ€™re not navigating the audit alone. You are backed by a team that understands CRA audit tactics inside and out, knows how to present your case persuasively, and is committed to minimizing your financial exposure. Our goal is not just to resolve the audit, but to put you in the strongest possible position for your future financial health.

If youโ€™re facing a net worth audit, getting help from our experts is the smartest financial move you can make.

Regional Help,  Canada-Wide

While weโ€™re based in Toronto, our tax audit specialists provide audit and CRA dispute representation for clients across Canada. You donโ€™t need a tax lawyer; we get the same results for less.

Why Canadians Trust TaxAuditHelp.ca

  • Led by CPA Sam Faris, with 20+ years of CRA audit experience
  • Strategic, confidential, judgment-free support
  • We donโ€™t provide โ€œchurn-and-burnโ€ service; we passionately fight every clientโ€™s case
  • Proven results in defending and resolving audits and disputed assessments
Photo of Sam Faris
Google logo
250+ 5 Star Reviews
Excellent
Faris CPA
Based on 343 reviews
Perfect and excellent service.
Top consulting firm I have ever dealt with. Donโ€™t listen to any other professionals but Sam Faris. He is honest, trustworthy and very professional on both personal and business levels. He won my case against the CRA and the audit went through very smoothly because of his top notch service and expertise. I wish I met Sam before. I paid other professionals but they were disappointing and did not deliver what Sam delivered. Many thanks Sam and I will definitely refer my clients and family to him.
I was referred to Sam Faris by a tax lawyer to handle my a complicated tax audit by the CRA and to refile all my outstanding corporate and personal tax returns. He was highly recommended by the tax lawyer and by other professional. The minute I hired Sam to sort out the big mess that I had with the CRA, I felt I am safe and in a good hands. He and his team were responsive to my questions and my concerns. Once he completed his work, he insisted to meet in person with the auditor and the team leader. His work quality was second to none. He backed up all accounts prepared a perfect reconciliation. On that basis, he presented his work confidentially and was able to convince the CRA team with his position and his calculations. I must admit that Sam Faris is the best tax consultant and he is a life saver. As a side note, his fee is very reasonable considering to other professionals and more importantly the work quality and the results that he achieved are unbeatable.
I was referred to Mr. Faris by another professional who recommended him to deal with my multiple years of outstanding corporate and tax returns. I interviewed Sam and was impressed in his confidence and transparency. He did not promise the moon just to get my business. Sam was able to file all returns under the voluntary disclosure program. After completing filling all tax returns, I realized the amount of money he saved me. I enjoyed very much working with him. He ensured that the work progress flow smoothly without any complications. He took to consideration the emotional stress factor and he was available to speak with me even beyond business hours just to make me more calm and to make me feel that he is on top of the matter and it will be resolved to my satisfaction. Indeed, this is what happened. The matter was resolved to my satisfaction and CRA concluded that the returns which Sam filed are reasonable and there is no need to further audit me nor my company. In summary, Sam is a life saver. He saved me and saved my family and now I am in the right track where all my tax filing obligations are met and I donโ€™t owe any taxes. So grateful to Sam and his dedication while working on my file.
Sam is an excellent CPA and the best tax consultant in the country. He helped me to deal with a very complicated tax audit with the CRA where the CRA sent me a proposal assessment of 1.5 million dollars based on their net worth audit calculation and analysis. Sam was able to provide a counter analysis which highlighted significant mistakes that the auditor made with his assumptions and calculations. Itโ€™s ridicules that CRA wanted to taxed me on a loan that I obtained from my bank. Sam dealt with this audit perfectly. He demonstrated a very high level of expertise and CRA had to accept his counter analysis with no question asked. Many thanks to Samโ€™s efforts and high business standards in dealing with this issue and resolve it to my favor. I will have Sam as my primary CPA going forward so I can focus on doing business and will have a peace of mind in terms of the high quality of work done by him. Well deserved this review with the 5 stars rating.
Sam Faris helped me with a complex cross border tax matter. This issue involved 12 years of tax returns and it was as a result from mistakes that my previous accountant did. He was able to perfectly address the issue with the CRA and to fix the returns under the voluntary disclosure program. End results; CRA accepted Samโ€™s work with not a single question and the returns were reassessed to my satisfaction without penalties and interest. Many thanks to Sam brilliant work.
I found Samโ€™s firm online and I read the excellent Google reviews about him and his team. I decided to hire him to help me navigate an issue with the CRA. Sam delivered as expected and as promised. Results were to my satisfaction and I am very happy with how the process was handled. Highly professional and extremely knowledgeable.
after the initial assessment I had with Sam, he proposed a strategy to dispute CRA decision. He knew up front how to approach my case as he seemed that he dealt with similar cases many times. I hired him the end results were as promised and no surprises. Sam is very trust worthy and has a high business standards. May thanks Sam.
I recently turned to Faris CPA for help with my tax filing, and I must say, I'm over the moon with the results! The whole process was a breeze, saving me time and stress. What really stood out was the friendly professionalism, impressive expertise, and crystal-clear communication from Sam and his team. They made what could've been a daunting task feel like a walk in the park! If you're looking for a warm, approachable tax expert who genuinely cares about his clients, I wholeheartedly recommend Sam and the folks at Faris CPA - they're great tax consultants!

What to Expect When You Work With Us

Consultation

We discuss your situation, review your CRA documents, and advise you of your rights, potential outcomes, and next steps based on your instructions.

Audit & Dispute Defence

We organize your paperwork, prepare a response package, and communicate with the CRA on your behalf.

Resolution

Our goal is to present airtight submissions that deliver the best outcomes, reduced penalties, fair assessments, and peace of mind.

Real Results From Clients Like You

  • How Our CRA Net Worth Audit Services Saved a Client $3.5 Million

    A new client, referred by an existing client, came to us after facing a net worth audit that threatened serious financial consequences. The outcome of the initial audit would have significantly affected his financial security and quality of life.

    Due to our extensive experience handling CRA net worth audits, we determined that while the auditor performed their calculations using assumptions, we would independently conduct a comprehensive review based on verified facts and documentation.

    When the auditor issued their initial assessment, our client was faced with a $4 million tax bill. Using the evidence and analysis we compiled, we successfully challenged the audit findings. The CRA revised its calculations to match our figures.

    With the intervention of our audit specialists, the final tax bill was reduced to $500,000, resulting in a savings of $3.5 million for our client.

Get Trusted Help with Tax Disputes & Problems

Book an assessment today to know where you stand.
Location

Location

100 King Street West, Suite 5700 at Bay and King Street
Please enable JavaScript in your browser to complete this form.
Name
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram