Audits

The Consumer Taxation Branch is responsible for the administration of tax under four provincial statutes, including the Motor Fuel Tax Act. To ensure this happens in accordance with the legislation, we routinely conduct audits of taxpayers.

An audit is a formal examination of a taxpayer's financial records to ensure taxes have been collected, remitted or paid as required. An audit will identify any areas where this may have been done incorrectly.

Any taxpayer, including businesses large and small, can be audited. Taxpayers may be chosen randomly, based on a special audit project, legislated program, risk, or referral from another audit.

Effective February 21, 2007, audit assessment limitation periods are reduced from six years to four years. This includes assessments related to audits that began before February 2007, but have not had a Notice of Assessment issued. This change does not impact periods for which an audit period waiver has been signed or cases of fraud, which do not have a limitation period.

Our bulletin, Understanding Your Consumer Tax Audit (GEN 009) outlines what to expect during an audit and how to prepare for it. It includes a flow chart outlining the audit process. The bulletin also contains information about what auditors look for during an audit, which may help you with your record keeping.

If you have been selected for an audit, you can expect us to follow these steps:

• Before the audit, we will make contact with you if we need to meet and/or have access to your records.
• At the start of the audit, we will review the audit process and Taxpayer Fairness and Service Code rights at your place of business or representative's office. You also have the right to appeal to the Minister.
• During the audit, we will review your records (up to four years previous) and be willing to discuss issues of interpretation that arise from the audit.
• When the audit is complete, we will review and explain the results, notify you if an amount is owed, and make you aware of your options if you disagree with the results. If needed, you will be given a reasonable time period to review the results before an assessment is finalized.
• If you provide additional information after the audit, we will review it and determine if an adjustment is needed.

If you disagree with the results of an audit, and/or with the resulting Notice of Assessment, you have the right to appeal. Interest will be charged from the issue date on your Notice of Assessment. If you plan to appeal it is in your best interest to pay the assessed amount. If your appeal overturns the assessment, you will be refunded the amount you have paid, with interest. Please see our Appeals page for more information.