From: nationaltaxservicecanada@gmail.com   
      
   Benford’s Law - The ‘Number One’ Method of Finding Tax Audit Targets   
       
   It is a fact that not all Canadians accurately report their income or   
   deductions from their income when filing their tax returns. Sometimes on   
   purpose but just as often it happens by accident.   
       
   And it is because of a few ‘number fudgers’ that the Canada Revenue Agency is   
   forced to audit Canadian individuals and businesses. Trying to catch those who   
   may not have properly reported their yearly income.   
       
   But how do they do this?  How does the Canada Revenue Agency choose who to   
   audit? With tens of millions of individuals and businesses filing tax returns   
   they just can’t audit everybody. They don’t have the employees to accomplish   
   such a mammoth feat. Or    
   the time. So perhaps it’s your past history that will make you a candidate. Or   
   the type of business you operate. Something unusual on your return. Or just   
   blind chance. But these aren’t the only methods of finding audit targets –   
   there’s also Benford’s    
   Law.   
       
   Benford's Law hints to the frequency distribution of digits. In a   
   distribution, the number 1 occurs as the leading digit about thirty percent of   
   the time, the number 2 eighteen percent of the time, the number 3 twelve point   
   five percent of the time and    
   so on. Larger numbers occur in the leading position less frequently - 9 as the   
   first digit less than 5% of the time. Benford's Law also concerns the expected   
   distribution for digits following the first.   
       
   So what does this have to do with your tax return?   
       
   Well, people who ‘fudge’ numbers, tend to distribute the lead numbers randomly   
   but equally i.e. one is as likely to be found as the first number as five or   
   nine is.  In short – the distribution of ‘fudged’ numbers tends not to be   
   random.   
       
   So when your tax return is examined by a Canada Revenue Agency computer   
   program looking for tax return anomalies, those tax returns that do not have   
   random number distributions i.e. number 1 is the lead digit in a series as   
   often as 3 or 5 or any other    
   number, then the CRA may decide to audit your tax return.   
       
   It has been found that Benford’s Law is very effective at pinpointing what   
   sort of tax information is most prone to error or fraud. Which tells the CRA   
   how best to deploy their resources. The Tax Auditor.   
       
       
       
   If the Canada Revenue Agency has contacted you or you fear that you may be a   
   candidate for a tax audit let National Tax Service http://www.na   
   ionaltaxservice.ca/ assist you today.   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)