https://sdtaxlaw.ca/tax-lawyer-cra-unreported-income/#:~:text=Through%20information%20sharing%20agreements%20with,unreported%20income%20from%20foreign%20sources.
Information Sharing Agreements
The CRA collaborates with domestic and international organizations to exchange information related to financial transactions and assets held abroad.
Through information sharing agreements with other jurisdictions, the CRA can access data on bank accounts, investments, and assets held by Canadian taxpayers outside the country, helping to uncover unreported income from foreign sources.
Lifestyle Audits
In cases where discrepancies or inconsistencies are detected, the CRA may conduct lifestyle audits to assess an individual’s standard of living relative to their reported income.
By examining spending patterns, asset acquisitions, and other indicators of wealth, the CRA can identify individuals whose lifestyles appear inconsistent with their reported income, raising suspicions of unreported income.