CRA uses Facebook to audit
The CRA only provides a generic description on how they select files for audit. According to the CRA website, they select files based several different conditions, such as “the potential for errors in tax returns or indications of non-compliance with tax obligations.”
Techniques used by the Canada Revenue Agency (CRA) are never clearly disclosed. Over the years the CRA has adapted and developed unconventional audit techniques in hopes of catching tax evaders. One of these techniques is called Indirect Verification of Income, where the CRA tries to match a taxpayer’s lifestyle to their reported income. In order to do this the CRA has relied on sources such as Facebook and other social media outlets to build cases against taxpayers.
With falling tax revenues and increasing deficits governments will continue to use unconventional audit techniques if it results in more taxes being collected.