Investigators can select returns that are above average or below average in a specific financial category or they can combine various financial factors in one search. Auditors look for non-compliance, undisclosed income and inconsistencies or unusual patterns in selecting audit criteria and candidates. Personal returns are not audited, as individuals do not have financial books. However, they may be screened when auditors carry out assessment checks for RRSP contributions, moving expenses or any other claim categories. Tax credits, like medical expenses and charitable donations, reduce the amount of tax payable.
Credits also vary from province to province.
For instance, Ontario offers property, sales and child care tax credits and Manitoba has cost of living, property and learning tax credits, while British Columbia has a sales tax credit. Refundable tax credits have value even if no tax is payable. Credits reduce tax perhaps to zero. If credits exceed the tax payable, the difference is given as a tax refund. Non-refundable tax credits have no value when no tax is payable.