6 worked Corporate Tax Balance-Owing Review 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 balance-owing review work, not a specific client's file.
Case Study 1 · Missed incentive claimed
$136,000 In Credits Claimed That Prior Filings Had Missed — Instalment-Paying Corporation, Windsor
Client: A corporation paying instalments on prior-year figures · Where: Windsor, Ontario · Engagement: 5 weeks, fixed fee
Credits claimed$136,000
Years adjusted6
Review outcomeNo adjustment
The situation — A corporation paying instalments on prior-year figures, Windsor, Ontario
A corporation paying instalments on prior-year figures in Windsor, Ontario had been filing for 6 years without ever claiming the incentives its activity qualified for. Behind that sat retained earnings building in the operating company with no plan for extracting them.
What we did for A corporation paying instalments on prior-year figures, Windsor, Ontario
We tested each activity against the eligibility criteria rather than the description on the invoice, then mapped the association rules across the group, allocated the business limit deliberately on Schedule 23, and corrected the prior year by adjustment request.
The result — A corporation paying instalments on prior-year figures, Windsor, Ontario
$136,000 in credits claimed, with the open prior years adjusted as well. The claim passed review without adjustment.
Case Study 2 · Backlog brought current
Collections Halted And $133,000 Cut From A 6-Year Backlog — Corporation Holding Investments, Calgary
Client: An operating company holding surplus investments · Where: Calgary, Alberta · Engagement: 6 weeks, fixed fee
Balance reduced by$133,000
Backlog cleared6 years
CollectionsHalted
The situation — An operating company holding surplus investments, Calgary, Alberta
By the time an operating company holding surplus investments in Calgary, Alberta called, 6 years were outstanding and the CRA had assessed on estimates. Underneath it sat retained earnings building in the operating company with no plan for extracting them.
What we did for An operating company holding surplus investments, Calgary, Alberta
We reconstructed the records year by year and documented safe income before the inter-corporate dividend was paid, so subsection 55(2) had no room to recharacterise it as a gain. Each filing replaced an arbitrary assessment with a real one.
The result — An operating company holding surplus investments, Calgary, Alberta
The account is current. Filing on real numbers rather than CRA estimates reduced the balance by $133,000, and a relief application addressed part of the accumulated interest.
Case Study 3 · Objection and relief
Desk-Review Assessment Of $92,000 Vacated — Associated Corporation Pair, Surrey
Client: A corporation associated with a spouse-owned company · Where: Surrey, British Columbia · Engagement: 4 weeks, fixed fee
Assessment vacated$92,000
Supporting recordsNow on file
AccountCleared
The situation — A corporation associated with a spouse-owned company, Surrey, British Columbia
A corporation associated with a spouse-owned company in Surrey, British Columbia was carrying $92,000 of penalties and interest arising from passive investment income that had crossed the $50,000 grind threshold unnoticed, much of it accumulated during a period the CRA itself had delayed.
What we did for A corporation associated with a spouse-owned company, Surrey, British Columbia
We carried the non-capital loss back against the two profitable years and recovered tax already paid instead of holding a carry-forward balance and framed the relief application on the specific grounds the CRA guidelines recognise rather than on general hardship.
The result — A corporation associated with a spouse-owned company, Surrey, British Columbia
The assessment was vacated. $92,000 came off the account, and the documentation now on file makes the same position straightforward to defend next time.
Case Study 4 · Records and systems rebuilt
Books Rebuilt From Source, $10,500 In Unclaimed Input Tax Found — Import and Distribution Corporation, Kitchener
Client: An import and distribution corporation · Where: Kitchener, Ontario · Engagement: 4 weeks, fixed fee
Unclaimed tax found$10,500
Records rebuilt21 months
ProcessDocumented
The situation — An import and distribution corporation, Kitchener, Ontario
An import and distribution corporation in Kitchener, Ontario could not answer basic questions about its own numbers, because a loss year carried forward by default when carrying it back would have produced a refund cheque sat between the bank statements and the ledger.
What we did for An import and distribution corporation, Kitchener, Ontario
We rebuilt the instalment schedule off the current year rather than the prior year, ending the interest accrual, then documented the process so the work does not depend on any one person remembering how it was done.
The result — An import and distribution corporation, Kitchener, Ontario
Records rebuilt and reconciled, $10,500 recovered in input tax credits that the old file could not support, and a documented monthly process now in place.
Case Study 5 · Planning that cut the bill
$41,000 Cut From The Annual Tax Bill — Incorporated Trades Business, Guelph
Client: An incorporated trades business · Where: Guelph, Ontario · Engagement: 4 weeks, fixed fee
First-year saving$41,000
RepeatsAnnually
Filing positionUnchanged in risk
The situation — An incorporated trades business, Guelph, Ontario
An incorporated trades business in Guelph, Ontario was compliant but paying more than it needed to. The prior year had been filed correctly and still left a balance-due date the owner believed was the same as the filing date on the table.
What we did for An incorporated trades business, Guelph, Ontario
We modelled the current position against the alternatives before changing anything, then moved passive holdings into a separate structure so the operating company’s small business limit stopped grinding down.
The result — An incorporated trades business, Guelph, Ontario
The change saved $41,000 in the first year and repeats annually. Nothing about the filings became more aggressive; the position is simply the one the rules already allowed.
Client: A technology CCPC approaching its first profitable year · Where: Ottawa, Ontario · Engagement: 3 weeks, fixed fee
Proposed tax cleared$61,000
Review duration3 weeks
OutcomeNo change
The situation — A technology CCPC approaching its first profitable year, Ottawa, Ontario
A technology CCPC approaching its first profitable year in Ottawa, Ontario was selected for review after a distribution treated as tax-free capital dividend with no election ever filed showed up in the CRA's automated matching. The proposed adjustment on corporate tax balance-owing review came to $61,000.
What we did for A technology CCPC approaching its first profitable year, Ottawa, Ontario
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. Every figure in the response traced to a source record the auditor could verify without asking a second question.
The result — A technology CCPC approaching its first profitable year, Ottawa, Ontario
The review closed with no change. $61,000 of proposed tax came off the table, and the documentation now in place makes the next review a short one.
Reviewed for the 2025 tax year by Udit Gupta, Founder and Tax Accountant. 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.
