Student Loans And Auditing – Do You Have To Be Alarmed
Student files get audited every year. If your application form is one of them, the information presented in it will be checked for completeness and truthfulness. Penalties apply if your application contains false or inaccurate information. For instance, you may be denied access to funding or it may be limited.
Students may be required to supply a number of documents. Among them are rent receipts, receipts for tuition and textbooks, and child care receipts. You may be required to present copies of income tax returns, T4 slips, and bank statements. Other documents include letters from your employer that confirm your income and a separation or divorce agreement. In addition, you may be required to supply any other documentation that will make it easier to verify the information presented in your application.
It is a good idea to create a file and keep the documentation supplied with your application in it. This includes a working copy of it. If your application is chosen for audit, you may have to refer back to these documents. You may also have to refer to them throughout the academic year.
What happens if you fail to present the required documentation within the specified timeframe? You may see your college loan revoked, and financial assistance may be discontinued. It is also an offence to knowingly present false and misleading information. This applies to other documents as well, and you should be aware of the consequences. You may have to repay your student loan immediately. Criminal prosecution is another likely outcome.
Some three million returns get audited every year, and millions of students receive brown envelopes with a request or demand for information. While you now know what to do if you are audited (submit the required information), there are some things to do at to avoid getting audited. What if you have low income and a lavish lifestyle? Many tax payers are unaware that there is a procedure called net worth assessment. Such assessments are conducted by the Canada Revenue Agency if it is suspected that you work illegally and claim low income. If you annoy someone who know that you work illegally, the Canada Revenue Agency will be after you. Claiming eighty percent of your home expenses and ninety percent of your car expenses for business use is likely to trigger an audit. When it comes to these expenses, it is important to be reasonable and may pay to keep a log book. This one is a gross mistake, namely the cheating habit. You are quite likely to trigger a repeat review if you were caught being less than honest before. Forgotten T slips are another potential problem. If you do not report income from a T slip and fail to do it twice in 2 years, you can face substantial penalties.
Get the facts about student loans by applying for your loan.
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