Student Loans And Auditing FAQ

Nov. 29, 2011 - PRLog -- Student files get audited every year. If it happens that your application form is among them, the information you have supplied will be checked for truthfulness and completeness. Penalties apply if your application contains false or inaccurate information. For instance, you may be denied access to funding or it may be limited.

You may be required to present some documents. These include receipts for textbooks and tuition, rent receipts, as well as child care receipts. You may be required to present copies of income tax returns, T4 slips, and bank statements. Other documents to supply are a divorce or separation agreement and letters from an employer confirming your income. You may have to supply other documents that help verify the information contained in your application.

It is important to make a file of the documentation you have included in your student loan application. This includes a working copy of it. You may have to present and refer back to these documents if your loan application gets audited. You may also have to refer to them throughout the academic year.

What will happen if you fail to submit all documents within the timeframe the auditor requires? You may see your college loan revoked, and financial assistance may be discontinued - http://www.canadabanks.net/default.aspx?article=Student+L... It is also an offence to knowingly present false and misleading information. This holds true for other documents, and you should know the consequences. You may have to repay your student loan immediately. Criminal prosecution is another likely outcome.

Close to 3 million returns are subject to review each year, with millions of brown envelopes being sent with a demand or request for additional information. Now you know the procedures if you get audited, but you should also know what to do to prevent this from happening. What if you have low income and a lavish lifestyle? Many tax payers are unaware that there is a procedure called net worth assessment. The Canada Revenue Agency can conduct an assessment if the low income you claim covers up under-the-table work. If someone knows your income, and you annoy them by mistake, you may have some explaining to do. Then, you are likely to trigger an audit if you claim 90 percent of your car expenses and 80 percent of your home expenses for business use. Regarding these, be reasonable and open a log book. Getting into the cheating habit is a huge mistake. You are quite likely to trigger a repeat review if you were caught being less than honest before. Forgotten T slips are likely to get you in trouble as well. Failing to report income from T slips twice in two years may result in penalties.

How to Consolidate Student Loans: http://www.canadabanks.net/default.aspx?article=How+to+Co...

# # #

Canadian Banks focuses on the Canadian banking industry, featuring articles about Canadian financial institutions, mortgage, credit and debt. The site also features loan, mortgage and credit calculators. http://www.canadabanks.net