4 Ways the CRA Uses Technology to Watch You
Technology has provided us with faster ways to do business and access information. Unfortunately, the CRA can benefit from tech as well. Here’s how the CRA uses technology to keep tabs on you and your business.
The CRA (Canada Revenue Agency) is increasingly relying on technology to conduct their investigations. The agency is continuously monitoring and collecting and analyzing vast amounts of data all in the search for impropriety.
The goal of these seemingly invasive measures is to sniff out tax fraudsters and evaders; however, it’s essential Canadian business owners are aware of what in their personal lives the government is snooping on. Let’s break down four ways the CRA could be keeping tabs on you to determine if you should be audited or not.
1. Online Buying and Selling Habits/Social Media
If you’re an avid user of popular platforms like eBay or Kijiji, which allows people to participate in online marketplaces, the government could have its eye on you, especially if you’ve failed to report any profit made from these places on your taxes. Data-mining is a relatively new process the CRA regularly undergoes, but it’s proven to be effective. In an interview with Global News, a CRA representative claimed a 40% increase in CRA revenue in just three years.
Facebook and Twitter are not exempt from moderation. Suspicious photos featuring lavish items posted to social media accounts can draw the attention of the CRA.
2. Bank Accounts
The CRA has the ability to see the contents of your bank account. The CRA regularly puts accounts with seemingly unscrupulous activity under their microscope. They are on the lookout for penalty-worthy offenses, such as over-contributing to a TFSA or undeclared income.
3. Using Computerization and AI
Computers are helping the CRA flag people for audits using artificial intelligence. Retailers, for instance have access to a lot of consumer information (what you purchase and when). They know what we buy and can conceivably share the data with the CRA.
What Does the CRA Do with this Information?
When the data is accrued, it provides “leads” for CRA agents (not proof). The next step would be to gather more information to see if there are grounds for a tax review or an audit.
The CRA can use the data create a net worth assessment for you. This is a set of figures of how much money they think you made. At that point it’s up to you (and your accountant) to defend yourself against these figures, reverse engineer them, if the amount is higher than expected.
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