When a CRA review happens, it’s rarely because someone “picked your name.” It’s usually because a pattern in the books triggered a flag — a ratio that doesn’t make sense, an expense type that’s out of proportion, or inconsistencies between what’s filed and what’s been reported elsewhere.

Here are the six areas that attract the most attention — and how to protect yourself from becoming an easy target:

1. Vehicle Expenses

One of the most commonly adjusted deductions. The CRA expects a mileage log — not estimates. They want proof of business use, fuel receipts that align with total distance, and consistency between vehicle ownership, insurance, and expense claims. Without that trail, they typically disallow a portion or all of the deduction.

2. Meals and Entertainment

Meals are legitimate when connected directly to earning business income — not just networking or casual meetings. The CRA looks for names, dates, and purposes written on receipts. The deduction limit (50%) makes this category easy to monitor, and excessive claims often trigger review.

3. Home Office Deductions

This area causes problems when the claim doesn’t match the size of the business or the percentage of the home used. The CRA checks for reasonableness — a claim that’s too aggressive for a small operation stands out immediately. They also look for overlap with other deductions like rent or utilities.

4. Contractor Payments

Payments to contractors must align with proper records — including invoices, business numbers, and in some cases T4A or T5018 slips. If names don’t match, or there’s no documentation, it raises questions around payroll vs. subcontracting — an area the CRA monitors closely for unpaid source deductions.

5. Travel Expenses

Trips that blend personal and business activities need clear separation. The CRA wants to see itineraries, invoices, and records showing the business purpose. A few extra days for leisure are fine — but the related costs must be proportioned accurately.

6. GST/HST Filing Consistency

This is one of the easiest cross-checks for the CRA. They compare your GST returns to your income tax filings, looking for mismatches in reported revenue. Even a small discrepancy can lead to a full review if it suggests poor record-keeping or missing invoices.

The Takeaway

Most CRA audits start from simple inconsistencies — not suspicion. What protects a business isn’t luck; it’s traceability. When every expense has a clear link to a business purpose, proper documentation, and logical timing, the file holds up under scrutiny.

Good bookkeeping doesn’t eliminate risk — it just makes every answer easy to prove.

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