Audits are big business for Canada Revenue Agency.  Remember Al Capone was not sent to jail for murder or bootlegging, but was charged and found guilty finally for tax evasion!   There are red flags you should be reviewing in your tax returns to reduce the potential for audit.  Remember though, that if the number is what it is, and you have met all the rules and have the documentation, you should have no fear of an audit.

Inconsistencies in numbers across the years is not good if the number is expected to be consistent, such as insurance.  Insurance should be relatively stable unless there has been a change in your business.  Cost of goods sold (in a retail environment) should be stable from year to year and closely mirror industry standards.  For example, if you are selling tobacco, your margin should be very close to 10% on an annual basis.

Round numbers in a tax return are an indication that an estimation may have been done for an amount.  Although not impossible, it is improbable that ‘gasoline’ for a year would be $3,000!

Unrealistic numbers are a good audit trigger.  For instance, if you have $6,000 in gasoline for a vehicle and are reporting that you had a total of 12,000 kms for the year, that means that it cost (6000/12,000x100) $50 per 100 kms.  If your tank is full and you can go 400 kms on a tank, that means it cost you $200 to fill the tank... not very realistic.  Another one to check is your gross margin.  If you are selling items, your gross margin (Sales less cost of goods sold) should be a realistic number for your industry. 

Income should equal income reported on your GST returns (unless there are significant sales that are not taxable).  There is a cross check done to ensure the amounts reported are the same.       

Your industry code (which is reported on your tax return) could also lead to an audit.  If you are in a target group (truckers) or in a group with a history of reporting issues (restaurants), you may have an increased possibility of an audit.

Your choice of a tax preparer may have an impact on the possibility of an audit.  If your return is prepared by a professional accountant with a designation and a good reputation, there is less chance of an audit than if you had prepared it on your own.