6 worked CRA Audit Representation 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 cra audit representation work, not a specific client's file.
Case Study 1 · Deadline rescue
$127,000 Late-Filing Penalty Cancelled On Relief Application — Restaurant Under Net-Worth Audit, Red Deer
Client: A restaurant under a net-worth audit · Where: Red Deer, Alberta · Engagement: 10 weeks, fixed fee
Penalty cancelled$127,000
Relief applicationGranted
ReturnAccepted as filed
The situation — A restaurant under a net-worth audit, Red Deer, Alberta
A restaurant under a net-worth audit in Red Deer, Alberta had already missed one deadline and was about to miss a second. Behind it sat an audit conducted over the phone, with nothing on file showing what had been provided or when, and a penalty of $127,000 was accruing.
What we did for A restaurant under a net-worth audit, Red Deer, Alberta
We split the work into what had to happen before the deadline and what could follow it, then filed the Tax Court appeal inside the window and resolved the remaining adjustments before a hearing date was needed.
The result — A restaurant under a net-worth audit, Red Deer, Alberta
The outstanding return was accepted as filed, and the taxpayer relief application cancelled $127,000 of the penalty already assessed on the earlier year.
Case Study 2 · Sale and succession
$435,000 Sheltered By The Lifetime Capital Gains Exemption — Employer Under Payroll Review, Victoria
Client: A company facing a payroll trust examination · Where: Victoria, British Columbia · Engagement: 8 weeks, fixed fee
Gain sheltered$435,000
ClosingOn schedule
Share qualificationMet
The situation — A company facing a payroll trust examination, Victoria, British Columbia
A company facing a payroll trust examination in Victoria, British Columbia had an offer on the table and 29 months to close. The shares did not qualify for the capital gains exemption, and no valuation on file to support the price the parties had agreed was part of the reason.
What we did for A company facing a payroll trust examination, Victoria, British Columbia
We purified the corporation so the shares met the qualifying tests, then requested the auditor’s working papers and report to see how the assessment had been built before answering any of it well ahead of the closing date.
The result — A company facing a payroll trust examination, Victoria, British Columbia
The sale closed on schedule with $435,000 sheltered by the lifetime capital gains exemption across the shareholders.
Case Study 3 · Planning that cut the bill
$19,500 Cut From The Annual Tax Bill — Assessed Shareholder, Windsor
Client: A shareholder assessed on a taxable benefit · Where: Windsor, Ontario · Engagement: 4 weeks, fixed fee
First-year saving$19,500
RepeatsAnnually
Filing positionUnchanged in risk
The situation — A shareholder assessed on a taxable benefit, Windsor, Ontario
A shareholder assessed on a taxable benefit in Windsor, Ontario was compliant but paying more than it needed to. The prior year had been filed correctly and still left a net-worth assessment built on unexplained deposits that were actually loan proceeds on the table.
What we did for A shareholder assessed on a taxable benefit, Windsor, Ontario
We modelled the current position against the alternatives before changing anything, then assembled the contemporaneous records, filed a structured response to each proposed adjustment with the supporting documents indexed, and had the proposal withdrawn.
The result — A shareholder assessed on a taxable benefit, Windsor, Ontario
The change saved $19,500 in the first year and repeats annually. Nothing about the filings became more aggressive; the position is simply the one the rules already allowed.
Case Study 4 · Objection and relief
Desk-Review Assessment Of $129,000 Vacated — Director Facing Assessment, Moncton
Client: A business owner with a director liability assessment · Where: Moncton, New Brunswick · Engagement: 10 weeks, fixed fee
Assessment vacated$129,000
Supporting recordsNow on file
AccountCleared
The situation — A business owner with a director liability assessment, Moncton, New Brunswick
A business owner with a director liability assessment in Moncton, New Brunswick was carrying $129,000 of penalties and interest arising from a proposal letter with a 30-day response window and no supporting records assembled, much of it accumulated during a period the CRA itself had delayed.
What we did for A business owner with a director liability assessment, Moncton, New Brunswick
We brought every outstanding return current, then negotiated a payment arrangement that stopped the collections action and framed the relief application on the specific grounds the CRA guidelines recognise rather than on general hardship.
The result — A business owner with a director liability assessment, Moncton, New Brunswick
The assessment was vacated. $129,000 came off the account, and the documentation now on file makes the same position straightforward to defend next time.
Case Study 5 · Missed incentive claimed
Incentive Review Recovered $48,000 Across 7 Open Years — Late-Objection Taxpayer, Barrie
Client: A taxpayer whose objection window has closed · Where: Barrie, Ontario · Engagement: 8 weeks, fixed fee
Recovered$48,000
Open years claimed7
Ongoing trackingIn place
The situation — A taxpayer whose objection window has closed, Barrie, Ontario
An incentive review at a taxpayer whose objection window has closed in Barrie, Ontario started from a simple question: what has never been claimed? The answer ran to 7 years, driven by an audit conducted over the phone, with nothing on file showing what had been provided or when.
What we did for A taxpayer whose objection window has closed, Barrie, Ontario
We traced each unexplained deposit to its source — loans, transfers between accounts, an insurance settlement — and reduced the net-worth assessment accordingly, documenting eligibility to the standard a reviewer would apply rather than the standard a claim form requires.
The result — A taxpayer whose objection window has closed, Barrie, Ontario
The credits produced $48,000 across the open years, and the tracking now in place means the following year's claim is documented as the work happens rather than reconstructed afterwards.
Case Study 6 · Cash and remittance control
$64,000 Of Working Capital Freed From The Tax Cycle — Long-Term Non-Filer, Kelowna
Client: A taxpayer with eight years of unfiled returns · Where: Kelowna, British Columbia · Engagement: 6 weeks, fixed fee
Working capital freed$64,000
On-time remittancesEvery period since
Forecast horizon13 weeks
The situation — A taxpayer with eight years of unfiled returns, Kelowna, British Columbia
A taxpayer with eight years of unfiled returns in Kelowna, British Columbia was profitable on paper and short of cash every month. A waiver signed at the counter that kept an otherwise closed year open with no end date explained most of the gap.
What we did for A taxpayer with eight years of unfiled returns, Kelowna, British Columbia
We filed the disclosure through the Voluntary Disclosures Program before contact, which removed the gross-negligence penalty entirely and built a thirteen-week cash view so tax payments stopped competing with payroll for the same dollars.
The result — A taxpayer with eight years of unfiled returns, Kelowna, British Columbia
$64,000 was released back into working capital. Remittances have been on time every period since, and the forecast shows the tax outflow before it lands.
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.
