Back on Track with Trust Accounts Examination

What is an Assisted Compliance Examination

The Canada Revenue Agency (CRA) is offering a new Assisted Compliance Examination service that provides information and resources to eligible businesses or self-employed individuals to help them comply with their payroll trust account obligations. 
Assisted Compliance Examinations are a part of the CRA’s commitment to put people first. The service is intended to help you, as a business, understand and properly apply payroll related legislation, and make sure that you are aware of your payroll deducting, withholding, remitting, and reporting obligations.

What is a Payroll Examination

A CRA officer will contact employers to review the business’s books and records. The examination is mandatory and makes sure that a business is deducting, withholding, remitting, and reporting to the CRA all payroll deductions, such as CPP contributions, employment insurance premiums, taxes and employer‑provided benefits.
During the examination, the officer will:

• look at your payroll books and records
• identify and explain any discrepancies
• answer any questions you may have regarding your payroll obligations

How an Assisted Compliance Examination works

Offered as an additional service to the regular examination it will provide you with:

• an opportunity to self-correct outstanding amounts and tax slips
• information on available payroll resources
• information on how to navigate the CRA’s online portals

What to expect as an employer

A CRA officer may contact you by telephone or letter to schedule an examination. Before the examination, the officer will determine if your business qualifies for the assisted compliance examination service. While the examination is not voluntary, you can choose not to participate in the assisted compliance portion of the examination.
As part of the review, the officer may identify errors such as amounts owing or outstanding returns. If they find errors, you will have an opportunity to correct your filings or missing payments after the review. The official will be available to help you complete this and as part of the examination, will give you options to help bring your account up to date.
Before the scheduled meeting, make sure to gather the requested documents so they are available for the CRA officer. You may also want to prepare questions beforehand that are related to your payroll account as the CRA officer will be available to answer them. 

If your tax return was prepared or filed by a tax preparer

Although a professional tax preparer may have completed your payroll books and records and submitted the T-type returns (for example, T4 slips and T4A slips) on behalf of your business, you are responsible for making sure your business meets all its tax obligations. Generally, tax preparers will use the information you give them to prepare your remittance amounts or filings, but they may not be aware of all your tax obligations. This is why the CRA may contact you directly for an examination.

If the CRA identifies errors, but you don’t correct them

If you choose not to file or make the remittance payments to correct any errors identified during your examination, the CRA will note it in your account. The CRA may issue an assessment and may take future enforcement actions.

Webinars

Learn more about what to expect during a payroll examination in our recorded webinars:

• What to expect during a Payroll Examination 2.0
• Employee or Self-employed?

Related links

• Payroll
• Canada Pension Plan (CPP) and employment insurance (EI) rulings
• Voluntary Disclosures Program
• Liaison Officer service