6 Foreign Earned Income Exclusion Review tax and accounting engagements in full — what the client came to us with, what we did, and what it was worth. Each one is specific to foreign earned income exclusion review work, not a general example.
Case Study 1 · Structure rebuilt
Corporate Structure Rebuilt For $22,000 Of Annual Savings — Inbound Transferee on Assignment, Edmonton
Client: An inbound transferee on assignment · Where: Edmonton, Alberta · Engagement: 11 weeks, fixed fee
Saving per year$22,000
DocumentationComplete
Transfer basisRollover
The situation
The structure at an inbound transferee on assignment in Edmonton, Alberta had been set up years earlier for a business that no longer existed, and US tax paid but no foreign tax credit claimed on the Canadian return had become expensive.
What we did
We filed the section 216 election with the supporting rental statements and recovered the excess withholding as a refund. The reorganisation used the rollover provisions rather than a taxable transfer, so no tax fell due on the restructuring itself.
The result
$22,000 of annual saving, achieved on a tax-deferred basis. The minute book, elections and valuations are all in the file.
Case Study 2 · Sale and succession
Share Sale Restructured, $380,000 Less Tax On Closing — Emigrant Who Left Canada, Hamilton
Client: An emigrant who left Canada mid-year · Where: Hamilton, Ontario · Engagement: 7 weeks, fixed fee
Tax saved on closing$380,000
PriceAs agreed
Post-closing adjustmentsNone
The situation
An emigrant who left Canada mid-year in Hamilton, Ontario was preparing to sell. Due diligence surfaced a single shareholder holding every share, with no room to multiply the exemption, which would have reduced the price or killed the deal outright.
What we did
We cleaned up the historical file, filed the outstanding T1135 disclosures through the Voluntary Disclosures Program, which eliminated the penalty exposure entirely, and prepared the due-diligence package the buyer's advisers actually asked for.
The result
The deal closed at the agreed price. $380,000 of tax was saved against the structure originally proposed, with no post-closing adjustment.
Case Study 3 · Backlog brought current
Collections Halted And $52,000 Cut From A 4-Year Backlog — Non-Resident Owning Canadian Rental, Saskatoon
Client: A non-resident owning Canadian rental property · Where: Saskatoon, Saskatchewan · Engagement: 4 weeks, fixed fee
Balance reduced by$52,000
Backlog cleared4 years
CollectionsHalted
The situation
By the time a non-resident owning Canadian rental property in Saskatoon, Saskatchewan called, 4 years were outstanding and the CRA had assessed on estimates. Underneath it sat foreign accounts that had passed the $100,000 T1135 threshold three years earlier.
What we did
We reconstructed the records year by year and reported the deemed disposition properly on the departure return and claimed the foreign tax credits that had been left unused. Each filing replaced an arbitrary assessment with a real one.
The result
The account is current. Filing on real numbers rather than CRA estimates reduced the balance by $52,000, and a relief application addressed part of the accumulated interest.
Case Study 4 · Records and systems rebuilt
Month-End Close Cut From 10 Weeks To 10 Days — Canadian Corporation with US, Brampton
Client: A Canadian corporation with US customers · Where: Brampton, Ontario · Engagement: 6 weeks, fixed fee
Close time before10 weeks
Close time after10 days
Year-endReview, not rebuild
The situation
The accounting file at a Canadian corporation with US customers in Brampton, Ontario was built on a departure year filed as a normal resident return with no deemed disposition reported. The year-end had taken 10 weeks each of the last three years.
What we did
We restructured the US holding so the Canadian and US characterisations aligned, ending the double taxation going forward and moved the reconciliations into the monthly cycle, so the year-end stopped being a rebuild.
The result
The file reconciles. Month-end closes in 10 days instead of 10 weeks, and the year-end is a review rather than a reconstruction.
Case Study 5 · Objection and relief
Desk-Review Assessment Of $34,500 Vacated — Canadian Resident with a, Red Deer
Client: A Canadian resident with a US rental property · Where: Red Deer, Alberta · Engagement: 9 weeks, fixed fee
Assessment vacated$34,500
Supporting recordsNow on file
AccountCleared
The situation
A Canadian resident with a US rental property in Red Deer, Alberta was carrying $34,500 of penalties and interest arising from a US LLC taxed as a corporation in Canada, producing double tax on the same income, much of it accumulated during a period the CRA itself had delayed.
What we did
We filed the section 216 election with the supporting rental statements and recovered the excess withholding as a refund and framed the relief application on the specific grounds the CRA guidelines recognise rather than on general hardship.
The result
The assessment was vacated. $34,500 came off the account, and the documentation now on file makes the same position straightforward to defend next time.
Case Study 6 · Deadline rescue
5-Week Turnaround Beat The Deadline And Saved $110,000 — Shareholder of a US, Moncton
Client: A shareholder of a US LLC · Where: Moncton, New Brunswick · Engagement: 5 weeks, fixed fee
Late-filing penalty avoided$110,000
Filed with18 days to spare
Next yearPapers ready
The situation
With the deadline for foreign earned income exclusion review weeks away, a shareholder of a US LLC in Moncton, New Brunswick was carrying US tax paid but no foreign tax credit claimed on the Canadian return. The exposure if the date slipped was around $110,000.
What we did
We filed the outstanding T1135 disclosures through the Voluntary Disclosures Program, which eliminated the penalty exposure entirely. The filing went in complete rather than provisional, so there was no amended return to follow.
The result
Filed with 18 days to spare. $110,000 in late-filing penalties avoided, and the working papers are ready for the following year.
Reviewed for the 2025 tax year by Udit Gupta, Certified Tax Accountant. Figures describe representative engagements of this type; outcomes depend on your own facts. Client names and identifying details are omitted for confidentiality.
