6 worked Bankruptcy Tax Return Assistance case studies — the position a client typically comes to us with, what we do, and what it is worth. Each is an illustrative example built on the rules that apply to bankruptcy tax return assistance work, not a specific client's file.
Case Study 1 · Missed incentive claimed
$82,000 In Credits Claimed That Prior Filings Had Missed — Disability Amount Claimant, Halifax
Client: A taxpayer claiming a dependant's transferred disability amount · Where: Halifax, Nova Scotia · Engagement: 4 weeks, fixed fee
Credits claimed$82,000
Years adjusted4
Review outcomeNo adjustment
The situation — A taxpayer claiming a dependant's transferred disability amount, Halifax, Nova Scotia
A taxpayer claiming a dependant's transferred disability amount in Halifax, Nova Scotia had been filing for 4 years. In that time, the incentives its activity qualified for were never claimed. Behind that sat RRSP room accumulated over eight years and never used in a high-income year.
What we did for A taxpayer claiming a dependant's transferred disability amount, Halifax, Nova Scotia
We tested each activity against the eligibility criteria rather than the description on the invoice. Then we recalculated the instalments on the current year’s expected income rather than the prior year’s, which stopped the instalment interest from growing.
The result — A taxpayer claiming a dependant's transferred disability amount, Halifax, Nova Scotia
$82,000 in credits claimed, with the open prior years adjusted as well. The claim passed review without adjustment.
Client: A taxpayer with US-source dividends · Where: Saskatoon, Saskatchewan · Engagement: 7 weeks, fixed fee
Penalty cancelled$112,000
Relief applicationGranted
ReturnAccepted as filed
The situation — A taxpayer with US-source dividends, Saskatoon, Saskatchewan
A taxpayer with US-source dividends in Saskatoon, Saskatchewan had already missed one deadline and was about to miss a second. Behind it sat a rental property reported without any capital cost allowance analysis. A penalty of $112,000 was accruing.
What we did for A taxpayer with US-source dividends, Saskatoon, Saskatchewan
We split the work into what had to happen before the deadline and what could follow it. Then we reported the disposition and filed the principal residence designation for the year of sale, closing the late-designation exposure before the CRA raised it.
The result — A taxpayer with US-source dividends, Saskatoon, Saskatchewan
The outstanding return was accepted as filed, and the taxpayer relief application cancelled $112,000 of the penalty already assessed on the earlier year.
Case Study 3 · CRA review defended
$128,000 Proposed Adjustment Withdrawn In Full — Gig-Economy Driver, London
The situation — A gig-economy driver, London, Ontario
A gig-economy driver in London, Ontario received a proposal letter opening a review of bankruptcy tax return assistance. The CRA had identified a home sale never reported on the basis that the gain was exempt anyway. It proposed an adjustment of $128,000, with 30 days to respond.
What we did for A gig-economy driver, London, Ontario
We treated the response as an evidence exercise rather than an argument. We reset the medical expense claim window, transferred credits between spouses, and applied the tuition and disability amounts to the return that used them. We then indexed every supporting document against the specific line the auditor had questioned.
The result — A gig-economy driver, London, Ontario
The proposed adjustment was withdrawn in full — all $128,000 of it. The file closed in 8 weeks with no change to the assessed amounts and no penalty.
Case Study 4 · Objection and relief
$115,000 Of Penalties And Interest Cancelled On Relief — First-Time Home Buyer, Burnaby
Client: A first-time home buyer · Where: Burnaby, British Columbia · Engagement: 11 weeks, fixed fee
Penalties and interest cancelled$115,000
Relief groundsAccepted
AssessmentAdjusted to filed position
The situation — A first-time home buyer, Burnaby, British Columbia
An assessment of $115,000 landed at a first-time home buyer in Burnaby, British Columbia following a desk review. It turned on three years of returns filed without the slips that had been mailed to an old address. The auditor had not seen the records behind it.
What we did for A first-time home buyer, Burnaby, British Columbia
We obtained the signed T2200 and rebuilt the employment-expense claim on the prescribed form with the supporting records attached to the file. We then set out the legislative basis for the position alongside the documents supporting it.
The result — A first-time home buyer, Burnaby, British Columbia
$115,000 of penalties and interest was cancelled under the taxpayer relief provisions, and the underlying assessment was adjusted to match the filed position.
Case Study 5 · Records and systems rebuilt
15 Months Reconciled And $7,500 Of Input Tax Recovered — Recently Separated Taxpayer, Brampton
The situation — A recently separated taxpayer, Brampton, Ontario
Nothing reconciled at a recently separated taxpayer in Brampton, Ontario. Every filing started with 15 months of cleanup. The file was carrying RRSP room accumulated over eight years and never used in a high-income year.
What we did for A recently separated taxpayer, Brampton, Ontario
We rebuilt from source rather than correcting on top of the existing file. We filed the outstanding T1135 disclosures under the voluntary disclosure route before the CRA raised them. Then we set the routine that keeps it clean.
The result — A recently separated taxpayer, Brampton, Ontario
15 months reconciled to the bank. The close now takes 10 days, and $7,500 of previously unclaimable input tax was recovered in the process.
Client: A two-income household with rental property · Where: Regina, Saskatchewan · Engagement: 7 weeks, fixed fee
Annual saving$10,500
ReorganisationTax-neutral
StructureMatches operations
The situation — A two-income household with rental property, Regina, Saskatchewan
The structure at a two-income household with rental property in Regina, Saskatchewan needed fixing. The file was carrying years of small donation receipts claimed one at a time instead of pooled onto a single return. Every option for fixing it ran through a reorganisation that had to be done without triggering tax.
What we did for A two-income household with rental property, Regina, Saskatchewan
We worked with the client's lawyer. Together, we pulled the full slip history from the CRA record, refiled the affected years by adjustment request, and recovered the credits that had been missed. We also prepared the elections, resolutions and valuations the structure needed to stand up.
The result — A two-income household with rental property, Regina, Saskatchewan
The structure now matches the business. Annual saving of $10,500, and the reorganisation itself was tax-neutral.
Reviewed by Udit Gupta, Founder and Tax Accountant for the 2025 tax year. These case studies are illustrative worked examples composed from the CRA rules that apply to this type of work, not specific client files; figures are representative and outcomes depend on your own facts.
