<ul><li>The Canada Revenue Agency (CRA) is increasing its scrutiny of cryptocurrency transactions, leading to a higher likelihood of audits for Canadian crypto enthusiasts.</li><li>Key factors that may trigger a crypto audit include large or frequent transactions, discrepancies between reported income and lifestyle, participation in Initial Coin Offerings (ICOs) or airdrops, mining or staking activities, and failure to report crypto transactions on tax returns.</li><li>To prepare for a potential audit, individuals should maintain detailed records, use crypto tracking software, separate personal and business activities, document their methodology, retain supporting documents, and stay informed about CRA guidelines and regulations.</li><li>When facing a CRA inquiry or audit, it is important to remain calm and review the notice carefully. Gather relevant information, consult a Canadian Crypto Tax Lawyer, respond promptly and honestly, and consider potential outcomes such as accepting adjustments, providing additional information, or filing an objection.</li></ul>

How to Prepare and Respond to a CRA Audit About Your Crypto Activities

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