I am often asked how the Canada Revenue Agency (“CRA”) selects its audit victims; oops, I meant to say taxpayers subject to audit. Through experience I know certain taxpayers, certain claims and certain industries seem to trigger audits. With that in mind, I will list below what I have seen and how I believe the CRA selects certain individuals and businesses for audit.
There are generally costs associated with hiring new employees – advertising costs, placement or recruitment agency fees, the time required to interview and evaluate candidates, etc. What some employers aren’t aware of is the fact that there are income tax credits (some refundable, others can only be used to reduce actual taxes owing) that can reduce the costs associated with hiring certain types of employees.