Enhancing Service to Large Businesses. The Audit Protocol Real-Time Audit Concurrent Audit Single-Window Focus

Transcription

1 Ehacig Service to Large Busiesses The Audit Protocol Real-Time Audit Cocurret Audit Sigle-Widow Focus 5&(5HY

2 Visually impaired persos ca get iformatio o services available to them, ad ca order publicatios i braille or large prit, or o audio cassette or computer diskette by callig weekdays from 8:15 a.m. to 5:00 p.m. Easter Time. La versio fraçaise de cette publicatio est ititulée Pour améliorer le service aux grades etreprises : Le protocole de vérificatio Vérificatio e temps réel Vérificatio cocourate Accet sur le service de guichet uique.

3 Early i 1997, the Caada Customs ad Reveue Agecy (CCRA) bega a umber of iitiatives to ehace our service to large busiesses. I take pride i the ethusiastic receptio these iitiatives have received from large corporatios. I the past year, iterest i our ew iitiatives has cotiued to grow. May large corporatios have already etered ito a audit protocol which is a key iitiative. Other corporatios, represetig a cross-sectio of Caadia idustries, are curretly egotiatig oe. We itroduced the audit protocol to icrease co-operatio, opeess, ad flexibility i the audit process. Although it is ot a legal documet, a protocol, developed by a corporatio ad the CCRA, represets a mutually agreeable framework that establishes guidelies for the audit process ad the relatioship. Both parties ca tailor the agreemet to reflect the corporatio s uique eeds. It covers the CCRA s major audit fuctios, icludig ay ivolvemet that may be required by specialized audit areas such as iteratioal tax, scietific research ad experimetal developmet, goods ad services tax/harmoized sales tax (GST/HST), excise tax, equity valuatios, real estate appraisals, tax avoidace, payroll ad reveue collectios. If requested, the protocol ca iclude customs duties ad provicial taxes. Our ew iitiatives also offer corporatios the optio of real-time audits ad cocurret audits. I a real-time audit, the CCRA looks at audit issues before a corporatio files its icome tax retur. I a cocurret audit, the CCRA co-ordiates its audit activities for the taxes it admiisters, icludig customs duties ad provicial taxes whe requested. A umber of compaies have take advatage of these optios with great success. Uder these ew iitiatives, the CCRA s large file case maager is resposible for maagig the compliace relatioship with the corporatio for all busiess lies by developig ad maitaiig ope, co-operative, ad timely commuicatio, ad workig to address all areas i a speedy ad professioal maer. The large file case maager is a sigle poit of cotact for the corporatio relatig to all audit activities. We have received excellet feedback from iterested parties. Their questios ad commets have allowed us to demostrate the beefits of usig audit protocols, real-time audits, ad cocurret audits. Their iput has helped us improve our service, as well as the iformatio i publicatios such as this oe. The CCRA recogizes that differet corporatios have differet eeds. We are flexible i our goal to improve service, ad we are always willig to cosult with our cliets. I am cofidet of your cotiuig iterest i this ew relatioship, which I believe is a efficiet, fair, ad cost-effective way of doig busiess. Rob Wright Commissioer of the Caada ad Reveue Agecy

4 7DEOHRI&RQWHQWV Page Audit Protocol... 5 Objectives... 5 Beefits... 5 Key elemets of a protocol... 5 Multi-year pla... 6 Audit pla... 6 Protocol relatioship... 6 Evaluatio process... 6 Guidelies for Developig a Audit Pla... 7 Real-Time Audit (RTA)... 7 Itroductio... 7 Objectives... 7 Beefits... 8 Prerequisites... 8 Process... 8 Page Cocurret Audit... 9 Itroductio... 9 Objective... 9 Beefits... 9 Process... 9 Sigle-Widow Focus Large File Case Maagers Itroductio Objectives Beefits Team audit Role of large file case maagers Questios ad Aswers Audit protocol Real-time audit (RTA) Cocurret audit Sigle-widow focus Large file case maagers... 14

5 $XGLW3URWRFRO A audit protocol or agreemet establishes a clear framework betwee the CCRA ad a corporatio for the audit process. As it is ot a legal agreemet, it does ot place ay additioal legal or statutory commitmets o the parties. 2EMHFWLYHV The audit protocol iitiative is desiged to ehace the compliace relatioship betwee the CCRA ad large corporatios by icreasig the efficiecy of the audit process ad by creatig a more co-operative, ope, ad trasparet relatioship. The protocol covers the CCRA s major audit fuctios, icludig ay ivolvemet that may be required by specialized audit areas such as iteratioal tax, scietific research ad experimetal developmet, goods ad services tax/harmoized sales tax (GST/HST), excise tax, equity valuatios, real estate appraisals, tax avoidace, payroll ad reveue collectios. Protocols will: ehace the relatioship betwee the CCRA auditors ad tax specialists for large corporatios; esure the most efficiet use of resources by both parties; provide a comprehesive ad co-ordiated approach to the CCRA s audit activities, icludig cocurret audits of all taxes admiistered by the CCRA; provide greater certaity to the corporatio regardig its tax liabilities; support the move to curret-year audit ad real-time audit; esure that the audit pla is as complete as possible ad that material compliace issues are disclosed early i the audit; delegate resposibility ad accoutability at a workig level while esurig redress, if ecessary, at a seior level; esure the cotiuity of audit staff o both sides; save costs (e.g., iterest) by esurig a quicker resolutio of both past ad curret issues, ad a quicker closig of audits; provide a framework for parties to cosult o the developmet of a audit pla ad the audit process (see Guidelies for Developig a Audit Pla o page 7); ad provide a framework that will facilitate ad ecourage provicial participatio i the developmet of audit plas ad audit activities. %HQHILWV The audit protocol beefits both corporatios ad the CCRA. Beefits iclude: availability of audit compliace checks, which ormally result i a reductio i the time required to complete a audit; ehaced certaity i the audit process resultig from a more co-operative, cosultative, ad ope approach to audit; ehaced ability to become curret ad remai curret, thereby resultig i a more efficiet use of resources as the parties will be workig with curret records ad the people ivolved will likely still be with the compay; decreased iterest expese for corporatios, sice reassessmets will be issued sooer; higher priority for real-time audits; higher priority for techical ad legal opiios; ad quicker resolutio of audit issues ad faster closig of the audit itself. H\HOHPHQWVRIDSURWRFRO The key elemets of a audit protocol are: the multi-year pla; the audit pla; the relatioship betwee the corporatio ad the CCRA; ad

6 the protocol evaluatio process. 0XOWL\HDUSODQ The audit protocol covers a multi-year pla that is mutually determied (preferably a 3-6 year period). It icludes both complete audit years ad audit compliace check years. Uder the protocol, the parties will mutually determie the startig ad tetative completio dates for each audit. $XGLWSODQ The parties to the protocol will work together to develop a audit pla. I doig so, the CCRA will select issues for audit based o risk aalysis. Both parties will develop ad implemet all other aspects of the audit pla related to process. The pla will be prepared before the start of each audit. It should: develop a flexible process for discussio ad resolutio of material compliace issues; provide the meas to idetify ad resolve sigificat issues up frot, to reduce the audit time of both parties; provide a clear ad cocise ratioale for all audit issues; provide for timely access to appropriate staff ad all relevat books ad records (icludig those i electroic form); establish time frames that ca be revised if ecessary; take ito accout the results of other compliace verificatios such as iteral audits ad provicial audits; take ito accout the Appeals Brach s ratioale for resolvig issues which are relevat i subsequet audits; esure the audit team has the appropriate expertise for all audit activities; provide a commitmet ad a time frame to resolve ay outstadig issues from previous audits; ad establish a process to measure the progress of the audit ad adjust the protocol or audit pla as mutually agreed to by the parties. 3URWRFROUHODWLRQVKLS The protocol will be siged, dated, ad implemeted by the followig idividuals: For the CCRA the large file case maager For the corporatio the tax maager These idividuals will review progress o the protocol as ecessary. If they caot resolve a issue, seior officials for each party will work to resolve it. Before ivolvig seior officials however, the parties should try to resolve the issue at a workig level by makig joit represetatios to other areas withi the CCRA, such as Techical Applicatios ad Valuatios Divisio, Compliace Programs Brach or Policy ad Legislatio Brach i Headquarters. The large file case maager will be resposible for establishig ad maagig the protocol ad its processes o behalf of the CCRA. For more details, see Sigle-Widow Focus Large File Case Maagers o page 10. (YDOXDWLRQSURFHVV At the ed of each audit or compliace check, the parties will hold a post-audit meetig to evaluate the process. By mutual agreemet, they will make ay required adjustmets to the protocol or subsequet audit plas.

7 *XLGHOLQHVIRU'HYHORSLQJDQ$XGLW3ODQ T he audit pla is a key elemet of a audit protocol. It is prepared before the begiig of each audit uder a protocol. The two parties work together to develop ad implemet the pla. The audit pla for the first audit cycle should form part of the protocol. Subsequet years audit plas are developed before the start of each subsequet audit ad are siged off by the protocol maagers. This will esure that the parties kow up frot what is expected from them durig the audit. The followig items should be part of a audit pla. Parties to a protocol are free to add other items, as log as they are cosistet with the core objectives ad key elemets of the protocol. Audit period Provide the audit period otig the year(s). Corporatios ad subsidiaries Iclude iitially idetified compaies to be audited. Outstadig issues Describe the process to resolve outstadig compliace issues from previous audits. Iitially idetified issues List all iitially idetified audit issues compay by compay, as well as all specific iformatio required compay by compay, ad the sequecig of the iformatio flow. The CCRA will select issues for audit based o risk aalysis. Iformatio requiremet List iitially idetified books ad records ad iformatio required at the begiig of each audit. Time frames List the agreed time frames for all requests issued by the CCRA. Describe procedures for dealig with exceptios. Provide aticipated audit start ad completio dates, ad agree to iform o a timely basis if the dates are delayed. Whe requested, the CCRA will cosider doig a real-time audit o agreed issues or a cocurret audit. Both parties i a protocol agreemet ca cosider the possibility of usig statistical aalysis as a audit tool. Audit team Describe the team size, its make-up, ad the agreed-o process for team members ivolvemet i the audit. Note The CCRA will keep the corporatio regularly iformed about the status of the CCRA s queries, fidigs, ad proposed audit adjustmets. Ideed, the large file case maager ad the tax maager will meet regularly to discuss the progress of the audit. The audit pla should be dated ad siged by the large file case maager ad the corporatio s tax maager to affirm the commitmet. 5HDO7LPH$XGLW57$,QWURGXFWLRQ A key feature of the CCRA s ew approach to a large-busiess audit is the optioal real-time audit (RTA). I a RTA, the CCRA coducts a audit of issues before the corporatio files its icome tax retur. Corporatios ca request a RTA by either eterig ito a audit protocol with the CCRA, or providig a letter of co-operatio with a request for a RTA. The letter or protocol should idetify RTA issues ad ackowledge that a high priority from the corporatio will be expected. The letter or protocol will also ackowledge the prerequisites ad the process of a RTA, as outlied i this publicatio. 2EMHFWLYHV The objectives of a RTA are to reduce audit time ad resolve issues quickly (before the tax retur is filed). This ew approach should improve both service ad compliace.

8 %HQHILWV RTA beefits both corporatios ad the CCRA. The beefits iclude: substatial time savigs for both parties due to the immediate availability of records ad access to the staff ivolved i their preparatio; early resolutio of recurrig items, thereby reducig the umber of appeals; assistace for the CCRA i its efforts to become ad remai curret; greater certaity for corporatios regardig their tax liability o idetified issues; potetial applicatio of fidigs to past ad future years; ad improved idetificatio of audit ad legislative issues. 3UHUHTXLVLWHV The prerequisites for a RTA are: a reasoable assurace that the audit ca be completed before the deadlie for filig the tax retur; full co-operatio ad a high priority from the corporatio; books ad records with complete iformatio ad documetatio o the idetified issues; the corporatio s disclosed tax positio o issues; ad a audit performed o completed trasactios with material cosequeces oly. A RTA ca be doe either after the corporatio s fiscal year ed or as soo as a trasactio has bee completed. Examples of issues suitable for a RTA iclude: recurrig items (taxable beefits, reserves, etc.); capital versus icome; classificatio of fixed assets; selected research ad developmet issues. 3URFHVV The followig items should be part of the RTA process: the corporatio either eters ito a audit protocol with the CCRA or provides a letter of co-operatio with a request for RTA; the corporatio makes the request i writig with sufficiet lead time; both parties agree to specified time frames ad the iformatio ad documetatio to be provided; both parties sig a documet outliig agreed positios o issues; the parties agree o a statemet of facts for issues o which agreemet caot be reached; whe a settlemet is reached o ay agreed issue, the corporatio sigs a waiver of objectio before the issue is fialized; oce the retur is assessed, the CCRA esures that it has bee filed accordig to the positios siged by both parties; each issue filed accordig to a agreed positio ad with complete disclosure will ot be subject to a further audit. The CCRA s policy o opeig a previously audited issue or period applies to issues audited uder a RTA. The policy states that, as a geeral rule, the CCRA will ot re-ope a previously audited issue or period. However, there will be exceptioal situatios where the CCRA will, ad is required to, re-examie a previously audited issue or period to esure fair admiistratio of the law. I admiisterig this policy for corporatios i the Large File Program, which icludes large coglomerates ad all corporatios with gross reveues i excess of $250 millio, tax services offices will cosult with the Busiess Audit Directorate i Headquarters; ad sale of a divisio, a plat, etc.; ad

9 the CCRA will reassess issues that are ot filed accordig to the agreed positios, were ot fully disclosed, or o which cosesus was ot reached. &RQFXUUHQW$XGLW,QWURGXFWLRQ Aother key feature of the CCRA s ew approach to a large busiess audit is the cocurret audit. I a cocurret audit, auditors may audit books ad records for customs duties ad provicial taxes, alog with the other taxes, at the same time. 2EMHFWLYH The objective of a cocurret audit is to reduce the audit burde for large corporatios by reducig the umber of visits from auditors. %HQHILWV The beefits iclude: a comprehesive ad co-ordiated approach to the CCRA s audit activities, which saves audit time for both parties; ad the possibility of coductig a cocurret audit with the provices, streamliig the audit process ad savig time for all parties. 3URFHVV The followig items should be part of the process for a cocurret audit: sigatory to a protocol or with a letter of co-operatio. The letter or protocol will idetify the type of tax to be covered, ackowledge that a high priority from the corporatio is expected, ad describe the agreed process. If the request relates to a cocurret audit with a provice, the CCRA will cotact the provice to solicit its participatio; the parties agree o the type of tax to be covered (e.g., excise, GST/HST, or customs) ad the years for which each tax is to be audited; the parties agree to specified time frames ad the iformatio ad documetatio to be provided for each tax; the CCRA s large file case maager is resposible for co-ordiatig the audit activities for all taxes; the members of the audit team will have expertise i the relevat areas, ad they will work uder the guidace of the large file case maager; ad the large file case maager will co-ordiate the developmet of a comprehesive audit pla with iput from the audit team. the request for a cocurret audit with customs or a provice will be made i writig by the corporatio, either as a

10 6LQJOH:LQGRZ)RFXV²/DUJH)LOH&DVH 0DQDJHUV,QWURGXFWLRQ CCRA s large file case maager (the maager) is resposible for maagig the compliace relatioship with the corporatio for all busiess lies. 2EMHFWLYH The maager is resposible for the overall compliace relatioship so that large corporatios will have a focal poit for cotact for all audit activities. This esures that audits will have a co-ordiated approach which saves audit time ad resources. %HQHILWV The beefits iclude: simplified dealigs betwee large corporatios ad the CCRA o tax ad audit matters; assurace of quality audits of large corporatios through the use of specialists as either advisors or auditors o a audit team; assurace of a co-ordiated approach to audit activities, thereby miimizig disruptios to large corporatios; ad better maagemet of the CCRA s resources. 7HDPDXGLW The maager uses team audit techiques to coduct a large file case audit. A audit team is composed of a maager, the auditors assiged to the maager (which may vary from two to four depedig o the size of the case), ad members from the required specialized audit areas. I special cases, whe a corporatio requests a slower itegratio of the members of the audit team, the maager will work with the corporatio to determie how ad whe the full audit team ca perform future audits. 5ROHRIODUJHILOHFDVH PDQDJHUV Large file case maagers: establish ad maage the protocol ad its processes; idetify ad procure ay expertise that may be eeded o the team from ay specialized audit area (e.g., iteratioal tax, scietific research ad experimetal developmet, goods ad services tax/harmoized sales tax (GST/HST), excise tax, equity valuatios, real estate appraisals, tax avoidace, payroll, iformatio techology); develop ad maitai ope, co-operative, ad timely commuicatio, ad work to address all areas of disagreemet i a speedy ad professioal maer; cotact idustry specialists to esure a proper uderstadig of the cotext i which the large corporatio operates, idetify the issues that eed to be addressed, ad brig sigificat issues to the attetio of idustry specialists; establish cotact with provices to solicit their iterest i participatig i the protocol ad the audit process; maage the audit process ad audit issues i a timely, ope, ad comprehesive maer; esure that all material issues are idetified, examied, discussed ad, if possible, resolved; seek opiios o a timely basis from Techical Applicatios ad Valuatios Divisio, Compliace Programs Brach or Policy ad Legislatio Brach i Headquarters, ad elist the support of the Large Busiess Audit Directorate i Headquarters if ecessary; ad provide a statemet o compliace at the ed of the audit, ad provide a commitmet to work with the corporatio to address ay idetified compliace issues for future audits.

11 4XHVWLRQVDQG$QVZHUV $XGLWSURWRFRO Q.1 What are the beefits of sigig a protocol whe a corporatio has o problems dealig with the CCRA? A.1 The aim of the iitiative is to ehace the audit process by icreasig co-operatio, opeess, ad trasparecy. With protocols, a well-fuctioig relatioship is established ad formalized at the outset through cosultatio o developmet of a audit pla. Protocols support the move toward real-time audits ad curret-year audits. Other beefits iclude: availability of audit compliace checks, which ormally result i a reductio i audit hours; decreased iterest expese for corporatios, sice reassessmets will be issued sooer; a comprehesive ad co-ordiated audit; more efficiet use of resources; a quicker resolutio of audit issues; ad a faster closig of the audit itself. If a high level of compliace ad co-operatio already exists, the protocol will build o the relatioship ad esure that it cotiues i the future. Q.2 Are protocols limited to large corporatios? A.2 Give the greater complexity ad variety of issues ormally associated with large busiesses, the audit protocol process has bee desiged to ehace service to corporatios i CCRA s Large File Program. I order to maximize the potetial beefits of the process, the Large File Program has bee expaded to iclude all of the approximately 540 large coglomerates ad corporatios with gross reveues i excess of $250 millio, from the 220 cases previously referred to i the 1996 protocol publicatio. Q.3 Ca a protocol be etered ito for oe or more issues, istead of for the full corporate tax retur? A.3 No. Protocols are to be etered ito for the full tax retur, maagig the etire audit process. A corporatio may request a real-time audit to cover oe or more issues. Q.4 What is the miimum or maximum period for which a protocol ca be etered ito? A.4 A protocol is a multi-year pla. However, there is o miimum or maximum period. Each case will be cosidered o its ow merit ad be mutually determied by the parties. A period of 3-6 years is recommeded. Q.5 Is there flexibility i who sigs the protocol? A.5 The large file case maager ad his or her couterpart i the corporatio should sig the protocol. It is the spirit of co-operatio ad the mutual commitmet to do the job well that is most importat. If a corporatio requests that the protocol be siged at ay other level, the CCRA will accommodate the request. Q.6 Ca modificatios be made to the model protocol? A.6 Yes. If a corporatio wats to eter ito a protocol, discussios will tailor the protocol for that particular corporatio. The protocol may iclude a process to adjust its elemets through mutual agreemet. Q.7 How does a complete audit differ from a audit compliace check uder a protocol? How much audit time will be reduced i years with audit compliace checks? A.7 I years with audit compliace checks, auditors will rely more o aalytical audit techiques to verify compliace. The itet is to esure compliace, ad that tax liabilities are beig met, more quickly tha i a complete audit year.

12 The amout of time it takes for a audit compliace check will deped o the issues ivolved i the specific case. Q.8 Does the audit compliace check apply to ay year covered uder the protocol? A.8 A audit compliace check may be carried out i ay year. However, a miimum of oe audit compliace check ad oe complete audit must be carried out uder a protocol. Q.9 Does a protocol have to describe the type of audit for ay subsequet audit cycle? A.9 The type of audit for the years i ay subsequet audit cycle ca be determied before the protocol is siged, or the protocol may simply state that this will be determied followig completio of the first audit cycle. A audit cycle ormally covers two years. Q.10 Ca the CCRA adjust years for which either audit compliace checks or complete audits were carried out? A.10 As a geeral rule, the CCRA will ot re-ope a previously audited issue or period. However, there will be exceptioal situatios where the CCRA will, ad is required to, re-examie a previously audited issue or period to esure a fair admiistratio of the law. Before adjustig a issue, the CCRA will esure that the issue is sigificat ad material. I admiisterig this policy for large corporatios, tax services offices have to cosult with Headquarters. The corporatio ca also idetify audit issues up frot whe seekig greater certaity regardig its tax liability. Q.11 Is there flexibility i who reviews the progress of the protocol ad who gets ivolved i solvig disputes? A.11 The protocol, icludig a dispute resolutio process, will be maaged by the large file case maager ad the corporate sigatory. However, if a issue caot be resolved at that level, the protocol will be flexible to allow seior maagers ivolvemet o a efficiet ad a timely basis. Q.12 Does a audit pla have to be prepared before sigig a protocol? A.12 The audit pla for the first audit cycle should be prepared before the protocol is siged. The pla will form part of the protocol. Audit plas for subsequet years will be developed before each audit starts, ad will be siged off by the protocol maagers. This will esure that the parties kow up frot what is aticipated from them durig the audit. Q.13 Will the CCRA sue a corporatio or its officers for ot followig a siged protocol? A.13 The CCRA caot ad will ot sue a corporatio or its officers for ot followig a protocol. The protocol is ot a legal documet ad therefore does ot place ay additioal legal or statutory commitmets o the sigatories. It is simply a uderstadig of co-operatio ad opeess. Q.14 Are beefits of a protocol available to a corporatio that does ot eter ito a protocol, or revokes it after eterig ito it? A.14 No. The beefits of a protocol are oly available to its sigatories. Q.15 Will the protocol apply at the idividual compay level or at the case level (icludig cotrolled files)? A.15 The protocol will apply at the case level. It should cover all files i the case. The CCRA expects that the protocol will be siged by all resposible tax maagers, or by a compay official who oversees all compaies i the case. Separate aexes may by used whe differet tax maagers are sigig for their respective compaies i the case. (I split cases, it may also be possible to have a sigle protocol.)

13 Q.16 Does the protocol cover braches ad divisios located outside Caada that operate idepedetly of a Caadia paret ad report to a higher foreig paret compay? A.16 Yes. All braches ad divisios i the case should be part of the protocol. Q.17 Will the CCRA cosider co-ordiatig audits with provices or eve becomig parters with provices i a protocol? A.17 The CCRA views both optios as desirable. Both federal ad provicial govermets wat to streamlie their tax admiistratios. Cocurret federal ad provicial tax audits would beefit both parties through partership efficiecies. The CCRA will cosider ay request for a co-ordiated audit, ad will take the ecessary steps to explore this possibility with the relevat provices. 5HDOWLPHDXGLW57$ Q.18 Is real-time audit (RTA) available to corporatios that do ot eter ito a audit protocol? A.18 Yes. If a corporatio prefers to provide a letter of co-operatio alog with a request for RTA without eterig ito a protocol, the CCRA will accommodate the request. Q.19 Ca the corporatio request a complete audit uder RTA as opposed to a audit of specific issues? A.19 Our experiece i large file audit suggests that it would be difficult, if ot impossible, to coduct a complete audit withi the time frame available uder RTA. Q.20 Will the CCRA meet its objective of becomig curret by gettig ivolved i RTA with corporatios? A.20 Becomig curret is a essetial first step i the move to RTA. The protocol will assist us i becomig curret. The time savigs resultig from performig a RTA o some issues will ehace the CCRA s efforts to become curret. If issues uder a RTA have some relevace to other years, the RTA s fidigs may be applied to those years. Q.21 Will the CCRA accommodate all requests for RTA? A.21 The CCRA will accommodate ay RTA request provided the followig prerequisites are met: there is reasoable assurace that the audit ca be completed before the deadlie for filig the tax retur; there is full co-operatio ad a high priority from the corporatio i respodig to audit queries; the audit is for completed trasactios with material cosequeces oly; the books ad records to be audited cotai complete iformatio ad documetatio o the idetified issues; ad the corporatio discloses its tax positios o the issues icluded i the audit. Q.22 Are corporatios required to treat issues i their tax returs based o CCRA s positios? A.22 The overall objective of RTA is to reduce audit time ad resolve issues quickly (i.e., before the tax retur is filed). However, if the parties caot resolve a issue, the corporatio ca file its retur based o its positio. The CCRA will reassess the issue. The regular objectio ad appeal procedures will the apply. Q.23 Ca a issue audited uder RTA be opeed for a subsequet review or reassessmet? A.23 Each issue filed accordig to a agreed positio ad with complete disclosure will ot be subject to further audit. The CCRA s policy o opeig previously-audited issues or periods equally applies to issues audited uder a RTA. The policy states that, as a

14 geeral rule, the CCRA will ot re-ope a previously-audited issue or period. However, there will be exceptioal situatios where the CCRA will, ad is required to, re-examie a previously audited issue or period to esure a fair admiistratio of the law. I admiisterig this policy for large corporatios, tax services offices will cosult with the Busiess Audit Directorate i Headquarters. &RQFXUUHQWDXGLW Q.24 Ca a taxpayer request a cocurret audit of customs duties or provicial taxes without eterig ito a protocol? A.24 Yes. If a corporatio prefers to provide a letter of co-operatio with a request for a cocurret audit of customs duties or provicial taxes without eterig ito a protocol, the CCRA will accommodate the request. If the request relates to a cocurret audit with a provice, the CCRA will cotact the provice to solicit its participatio i a cocurret audit. Q.25 If a cocurret audit with a provice is ot possible, will the CCRA participate i resolvig issues where provicial positios differ from those of the CCRA? A.25 If requested to do so by both the taxpayer ad the provicial tax authorities, the CCRA will participate i discussios ad i resolvig matters affectig both tax jurisdictios. Q.26 Who would co-ordiate a cocurret audit? A.26 The CCRA s large file case maager is resposible for co-ordiatig the audit activities for all taxes uder the audit protocol. This meas oe audit team led by the large file case maager. He or she is resposible for maagig the compliace relatioship with the corporatio, ad is able to call o departmetal expertise as eeded. Q.27 Will cocurret audits be for the same years for all taxes? A.27 Not ecessarily. As the CCRA becomes curret ad moves ito real-time auditig, the audit periods for differet taxes will get closer. 6LQJOHZLQGRZIRFXV²/DUJHILOH FDVHPDQDJHUV Q.28 Ca a corporatio approach the large file case maager (the maager) as a first cotact for all its dealigs with the CCRA? A.28 Yes. The maager is resposible for the compliace relatioship with all large corporatios o behalf of the CCRA. The maager s role icludes establishig ad maagig the audit protocol ad the processes idetified i it. Maagers actively participate i large file audits, ad co-ordiate all related activities by the team members. Q.29 How will the maager determie the size of the audit team ad its compositio to coduct a large file audit? A.29 A audit team is composed of a maager, the auditors assiged to the maager (which may vary from two to four depedig o the size of the case), ad ay members that may be required from specialized audit areas, such as iteratioal tax, scietific research ad experimetal developmet, goods ad services tax/harmoized sales tax (GST/HST), excise tax, equity valuatios, real estate appraisals, tax avoidace, ad payroll. The compositio of audit teams will vary with each large file audit, depedig o the issues idetified.

15 Q.30 Will the team size be agreed to with the corporatio before the audit? A.30 Yes. I developig a audit protocol, the parties will agree to the team size. The CCRA s objective is to coduct large file audits usig a full audit team. However, i special cases, whe a corporatio requests a slower itegratio of the members of the team, the maager will work with the corporatio to determie how ad whe the full audit team ca perform future audits.