Audit or Review?
The government uses the term review for some of these events. They consider these to be below the level of a full blown audit, although the taxpayer probably doesn’t feel that way!
How do I prevent an audit?
- Firstly, don’t submit medical receipts for “ABA tutoring” unless you have submitted a form T2201. You may submit medical expenses along with the form T2201, but I recommend that you submit the T2201 as soon as possible (just make sure that it is filled out correctly).
- Review the guide to disabilities and be sure about what you can claim for. This is not the time to be getting cute with the Feds.
- Don’t claim for medical expenses that have been paid for by another party. This is called double dipping and the Feds take a very dim view of this. Revenue Canada is very aware of the Autism Funding program in BC and they will be looking for anyone who may be double dipping. If this is the first time you are claiming medical expenses relating to ABA tutoring, it may be wise to write a cover letter with your tax return. If you give a brief account of what you are claiming and make a note that while you may be receiving funds from the BC government, these are NOT being claimed as a medical expense on your federal return.
- Don’t submit claims for materials. It won’t be approved. Claim these costs from the BC government Autism Funds program.
OK, so what if I am audited?
If you are called upon by the feds, don’t panic. What some people may consider being an audit may simply be a request for more information or to have receipts and invoices submitted. If you have organized your files properly, this should not be a problem.
If you can’t gather all your receipts and invoices for any given tax year (separate from those claimed from the BC government) within 5 minutes, then you are doing something wrong and you need to revamp your filing system.
If you are submitting receipts refer to the quote below from the government web site.
If submitting receipts ensure they are dated, they indicate “paid”, and that the type of goods or services received are clearly identified. It can be helpful to provide a list or summary of your expenses, including clear indications of whether any portion of certain expenses was reimbursed to you (e.g. through an insurance plan).