OTTAWA, May 1 (UPI) -- Canada's April 30 income tax filing deadline has tax assessors in Ottawa using a statistical tool that sniffs out suspicious returns because of too few "ones."
The Ottawa Citizen said Friday the flood of returns will be reviewed using Benford's Law, named for U.S. physicist Frank Benford, who worked as an engineer for General Electric. He determined in 1938 the number one will appear as the first digit more often -- 30 percent -- than other numbers in a series.
The theory contends the number two appears as the first digit 18 percent of the time, while nine accounts for just 5 percent of lead-off numbers, the report said.
What gives tax analysts a clue someone is trying to fudge returns is the human tendency to distribute numbers randomly, with an equal share of leading digits from one to nine, the newspaper said.
Under the principle, a bank statement would contain far more entries for numbers like $1.95, $10.50 or $1,079 than those beginning with larger numbers, such as $7.95, $800 or $93.10, the report said
However, Canada Revenue Agency spokesman Philippe Brideau told the Citizen the concept is only part of the primary screening of returns.
"Benford's Law is a useful initial risk-assessment tool. However, it is never used in reassessments or in support of reassessments, which are done based on facts and tax law," Brideau said.