Quote:
Originally Posted by troutman
Missing documentation
If an individual is unable to provide reliable documents to support the income they have declared, the CRA will determine income using other available information. For example, if a restaurant server has neglected to maintain a record of the income he or she received from tips, the CRA will look at credit card and cash receipts or sales to determine the employee's income for a determined period of time. It is the responsibility of the employee to maintain documents supporting their income.
Industry and regional averages
Through the use of sophisticated tools, the CRA may look at the average salary in a specific trade in a designated area. When an individual's salary falls well below the average, or if the individual's expenses are significantly above the average, the CRA may request more information and supporting documents.
Interesting, but I doubt people report more than a small percentage of their actual tips, and I doubt CRA has the resources to audit millions of people.
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Exactly, the girl I dated reported 5% of her tips (common reason being you tip out to your runners as well where she worked, so a cut of the standard 10% that is expected when you get audited) and kept the rest in a money jar so there's no paper trail. In fact, I know alot of servers do that and alot of her friends did that. Granted they all work part time hours so its less blatent, but where she worked, they all did this. So, the majority of your tips arn't being taxed, thus, its pretty much tax free.