Every year, the Canadian Taxation Bureau selects some tax forms for key inspection, and the effect is not bad. But for us, being examined by the tax bureau is not a good thing after all. Once there is a problem, the tax bureau will take care of it for a long time. In order to reduce the chances of tax investigation by the tax bureau, we must first understand the tax investigation mechanism of the Canadian tax bureau. In daily life, some friends will receive letters from the Canadian Taxation Bureau (CRA) requesting tax investigation. This is because Canada's tax system is based on taxpayers' self-assessment and self-report. In order to ensure that taxpayers abide by the law and do not evade taxes, the IRS will conduct regular tax inspections. The term of tax investigation is usually within 3 years from the date when the tax assessment form is issued by the tax bureau, but it is any tax year for those who cheat. So who will be taxed? Usually, the IRS will use the computer system to analyze the online tax returns, and if it finds any abnormality, it will check the individual or company according to the specific situation. The following is a common situation: it is far from the industry share (gross profit and net profit). Some kinds of expenses are too high, such as entertainment expenses, promotion expenses, office expenses, maintenance and repair expenses, which are quite different from previous years. According to the taxpayer's industry, the expense-income ratio is too high, and the expense-income ratio has risen sharply. Tax-avoidance investment can greatly increase income without paying taxes. There is sales but no GST. Losses in regular evening reports or long-term annual reports (such as income tax, payroll tax and HST) are reported in written or telephone form, or other people's information is collected during tax investigation. If there are many tax evasion in a certain industry, the tax bureau will set up projects to conduct special tax investigations on this industry, such as construction, decoration, jewelry, auto repair shops, convenience stores and so on. In addition, the tax bureau will also conduct spot checks. Therefore, in order to avoid the review risk, it is suggested to pay attention to the following contents to ensure safety. (1) Before issuing the tax bill, carefully check whether all contents are complete and whether the digital calculation is accurate. Sometimes missing a crime or filling in the wrong address will lead to a detailed inspection by the tax bureau. (2) Fill in all income, regardless of wage income, interest income and dividend income. The IRS will know all this information. (3) Avoid annual report losses. As an investment enterprise or self-employed, it is normal to lose money in the first year or two. However, long-term losses may attract the attention of the tax bureau. The tax bureau has a warning line (trigger) and statistics on the operation and profit level of different industries in different regions. (4) Timely tax declaration. There are several situations in which tax declaration is not timely: some immigrants do not know that tax declaration is an obligation; Some people mistakenly think that their company's withholding tax is equal to tax return; Some people think that without income, they will not file tax returns. The Inland Revenue Department sends out countless letters every year to remind those who have not filed tax returns. If there is no reply, the Inland Revenue Department will take action. Failure to file tax returns is illegal, and serious cases can lead to jail. (5) Expense deduction should be reasonable. Deductions must be related to income and reasonable. If the cost of travel or entertainment is too high, it will definitely attract the attention of the tax bureau. (6) Don't deceive yourself. Some people think that the income is cash or check (T4A is not opened), and the tax bureau doesn't know about it, or only reported a part of the income, which is a fluke. In fact, the tax authorities have attached great importance to some industries: construction industry, dealers, carpet laying, direct sales/pyramid selling personnel. For example, a merchant tells customers that if they pay cash, they will be exempted from HST. Unexpectedly, the customer is a tax official. The result can be imagined. (7) learn lessons.