Tax Tip:  CRA SELECTION FOR AUDIT - Why Me?

CRA audits are now generally selected by CRA’s Business Intelligence Units. Selection for audit usually means that CRA has already identified the taxpayer as being at higher risk of non-compliance. For example, this could mean that your business falls within a CRA target area, or, perhaps, that you are claiming a credit in which CRA has historically found high levels of non-compliance. At a recent forum, CRA indicated that since the implementation of their focus on higher risk taxpayers, 33% of audits have discovered unreported income.

Action Item - Keep well-organized records. In many situations, expenses may be denied if a proper trail cannot be demonstrated. This is especially true if you are operating in an industry of high interest to CRA.