What is “The Postal Code Project”?
The Canada Revenue Agency (CRA) has launched a new scheme dubbed “The Postal Code Project”. Its purpose is to track high income earners living in wealthy neighbourhoods. It uses a systematic approach to identify those individuals and review whether they are reporting income accurately.
What does it mean for me?
For individuals residing in areas identified, there is a greater likelihood that the CRA will reassess tax returns. If reassessed, taxpayers may owe significantly more tax than what was initially paid. Not to mention the additional interest and penalties related to the reassessed figures. Therefore, it’s better to report your income accurately to avoid penalties and interest.