April 24, 2015 – Andrew Seale from Yahoo Finance wrote a riveting article on whether or not the CRA can use your social media accounts against you.
Of course, technically and ethically, they should start by looking at your books and records to determine how much you’re making and spending, says Dale Barrett, a Toronto-based tax lawyer.
“Only if your books and records are lacking are they supposed to start looking at external sources of information,” says Barrett. If those don’t seem to be painting the full picture they can do what’s called a “Net worth assessment.”
“They’ll look at how much money it costs you to live, they’ll look at the type of vehicle you drive, the trips you go on and they’ll just make up what they think you earned over the three year period they’re auditing you for,” he says. “The danger in that is they’re not actually looking at your books and records – you could have gotten wedding gifts, you could have had inheritances given to you.”
The article in its entirety can be accessed here.