Is That a Ferrari ?

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Many images of expensive luxury cars and exotic vacationing are often found on social media. Why? Social media isn’t just a way for people to connect and communicate, but for people to post extravagant and luxurious photos depicting their wealth and luxurious life. This may be the case for many people, but what they don’t know is that they are incriminating themselves. Social media is public and anyone can access their posts. Social media has become very prevalent in today’s society and it has now become a helpful tool for the Canadian Revenue Agency to find people whose lifestyle does not match up with their income stated on their tax return. The Canadian Revenue Agency calls it “Indirect Verification of Income” and it’s an audit technique employed by the CRA. For example people who are sending their children to private school, taking luxurious vacations at resorts and driving a luxurious car but only are reporting that they earn around $45,000 on their tax return per year, will be more susceptible to an audit by Revenue Canada. If caught underreporting income, they may be subject to tax penalties or even prosecution. Therefore people should be careful and watch what they post because you never know who is looking at your social media page.

 

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