Can someone report me to CRA, and how does that trigger an audit?

Yes. CRA operates a Leads Program that accepts tips from the public about potential tax non-compliance. Tips can come from anyone: former employees, business partners, neighbours, or ex-spouses. CRA does not pay informants for general tips (unlike the United States IRS whistleblower program), but it does take tips seriously as one source of audit referrals.

CRA evaluates tips against its other risk indicators before deciding to open an audit. A tip alone does not guarantee an audit, and CRA does not automatically act on every piece of information it receives. However, a credible tip that is corroborated by publicly available information — property records, social media, business registrations — is more likely to trigger a review.

If you are audited as a result of a tip, the audit process is the same as any other — you have the same rights and obligations. CRA is not required to tell you that a tip prompted the audit or to disclose the identity of the informant. If you suspect someone may have filed a misleading tip to harm you, document your position carefully and respond to any audit requests through proper professional channels.