6 worked Corporate Tax Audit Support 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 corporate tax audit support work, not a specific client's file.
Case Study 1 · Cash and remittance control
$120,000 Of Working Capital Freed From The Tax Cycle — Non-Calendar Year-End Corporation, Mississauga
Client: A corporation with a non-calendar fiscal year-end · Where: Mississauga, Ontario · Engagement: 4 weeks, fixed fee
Working capital freed$120,000
On-time remittancesEvery period since
Forecast horizon13 weeks
The situation — A corporation with a non-calendar fiscal year-end, Mississauga, Ontario
A corporation with a non-calendar fiscal year-end in Mississauga, Ontario was profitable on paper and short of cash every month. Passive investment income that had crossed the $50,000 grind threshold unnoticed explained most of the gap.
What we did for A corporation with a non-calendar fiscal year-end, Mississauga, Ontario
We moved passive holdings into a separate structure so the operating company’s small business limit stopped grinding down. We also built a thirteen-week cash view so tax payments stopped competing with payroll for the same dollars.
The result — A corporation with a non-calendar fiscal year-end, Mississauga, Ontario
$120,000 was released back into working capital. Remittances have been on time every period since, and the forecast shows the tax outflow before it lands.
Case Study 2 · Deadline rescue
11-Week Turnaround Beat The Deadline And Saved $81,000 — Two-Shareholder CCPC, Lethbridge
Client: A CCPC with two shareholders · Where: Lethbridge, Alberta · Engagement: 11 weeks, fixed fee
Late-filing penalty avoided$81,000
Filed with13 days to spare
Next yearPapers ready
The situation — A CCPC with two shareholders, Lethbridge, Alberta
A CCPC with two shareholders in Lethbridge, Alberta was weeks away from the deadline for corporate tax audit support. Behind that sat a distribution treated as tax-free capital dividend with no election ever filed. The exposure if the date slipped was around $81,000.
What we did for A CCPC with two shareholders, Lethbridge, Alberta
We mapped the association rules across the group, allocated the business limit deliberately on Schedule 23, and corrected the prior year by adjustment request. The filing went in complete rather than provisional, so there was no amended return to follow.
The result — A CCPC with two shareholders, Lethbridge, Alberta
Filed with 13 days to spare. $81,000 in late-filing penalties avoided, and the working papers are ready for the following year.
Client: A holding company and its operating subsidiary · Where: Moncton, New Brunswick · Engagement: 6 weeks, fixed fee
Annual saving$52,000
ReorganisationTax-neutral
StructureMatches operations
The situation — A holding company and its operating subsidiary, Moncton, New Brunswick
The structure at a holding company and its operating subsidiary in Moncton, New Brunswick needed fixing. The file was carrying two corporations under common control filing as if each had its own $500,000 limit. Every option for fixing it ran through a reorganisation that had to be done without triggering tax.
What we did for A holding company and its operating subsidiary, Moncton, New Brunswick
We worked with the client's lawyer. Together, we reviewed each capital cost allowance pool and set the claim at the level that kept the small business deduction fully used rather than wasted. We also prepared the elections, resolutions and valuations the structure needed to stand up.
The result — A holding company and its operating subsidiary, Moncton, New Brunswick
The structure now matches the business. Annual saving of $52,000, and the reorganisation itself was tax-neutral.
Case Study 4 · Sale and succession
Share Sale Restructured, $280,000 Less Tax On Closing — Professional Corporation, Kitchener
Client: A professional corporation · Where: Kitchener, Ontario · Engagement: 3 weeks, fixed fee
Tax saved on closing$280,000
PriceAs agreed
Post-closing adjustmentsNone
The situation — A professional corporation, Kitchener, Ontario
A professional corporation in Kitchener, Ontario was preparing to sell. Due diligence surfaced a shareholder loan balance that would have been picked up as income on closing. That would have reduced the price or killed the deal outright.
What we did for A professional corporation, Kitchener, Ontario
We cleaned up the historical file. We documented safe income before the inter-corporate dividend was paid, so subsection 55(2) had no room to recharacterise it as a gain. Then we prepared the due-diligence package the buyer's advisers actually asked for.
The result — A professional corporation, Kitchener, Ontario
The deal closed at the agreed price. $280,000 of tax was saved against the structure originally proposed, with no post-closing adjustment.
Case Study 5 · CRA review defended
$100,000 Reassessment Reduced To Nil On Review — Second-Generation Manufacturer, London
Client: A second-generation family manufacturer · Where: London, Ontario · Engagement: 9 weeks, fixed fee
Reassessment reduced toNil
Tax protected$100,000
Prior filingsUndisturbed
The situation — A second-generation family manufacturer, London, Ontario
A review notice arrived at a second-generation family manufacturer in London, Ontario, covering corporate tax audit support for two tax years. The auditor's working position was an adjustment of $100,000. It was driven by a loss year carried forward by default when carrying it back would have produced a refund cheque.
What we did for A second-generation family manufacturer, London, Ontario
Rather than negotiate, we rebuilt the record. We reconstructed the capital dividend account from the underlying transactions and filed the subsection 83(2) election before the next distribution left the company. We then submitted a point-by-point response that answered each proposed adjustment with the document behind it.
The result — A second-generation family manufacturer, London, Ontario
The auditor accepted the documented position and closed the review without adjustment, protecting $100,000 and leaving the prior filings undisturbed.
Case Study 6 · Planning that cut the bill
$50,000 Cut From The Annual Tax Bill — Three-Location Franchisee, Hamilton
Client: A franchise operator with three locations · Where: Hamilton, Ontario · Engagement: 5 weeks, fixed fee
First-year saving$50,000
RepeatsAnnually
Filing positionUnchanged in risk
The situation — A franchise operator with three locations, Hamilton, Ontario
A franchise operator with three locations in Hamilton, Ontario was compliant but paying more than it needed to. The prior year had been filed correctly. It still left a balance-due date the owner believed was the same as the filing date on the table.
What we did for A franchise operator with three locations, Hamilton, Ontario
We modelled the current position against the alternatives before changing anything. Then we carried the non-capital loss back against the two profitable years and recovered tax already paid instead of holding a carry-forward balance.
The result — A franchise operator with three locations, Hamilton, Ontario
The change saved $50,000 in the first year and repeats annually. Nothing about the filings became more aggressive. The position is simply the one the rules already allowed.
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.
