6 worked Input Tax Credit 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 input tax credit review work, not a specific client's file.
Case Study 1 · Backlog brought current
Collections Halted And $99,000 Cut From A 4-Year Backlog — Mixed-Supply Practice, Hamilton
Client: A professional practice with exempt and taxable supplies · Where: Hamilton, Ontario · Engagement: 7 weeks, fixed fee
Balance reduced by$99,000
Backlog cleared4 years
CollectionsHalted
The situation — A professional practice with exempt and taxable supplies, Hamilton, Ontario
By the time a professional practice with exempt and taxable supplies in Hamilton, Ontario called, 4 years were outstanding. The CRA had assessed on estimates. Underneath it sat management fees between two related registrants carrying tax that only ever went out and came back.
What we did for A professional practice with exempt and taxable supplies, Hamilton, Ontario
We reconstructed the records year by year. We self-assessed the tax on the real property acquisition in the correct reporting period and claimed the offsetting input tax credit in the same return. Each filing replaced an arbitrary assessment with a real one.
The result — A professional practice with exempt and taxable supplies, Hamilton, Ontario
The account is current. Filing on real numbers rather than CRA estimates reduced the balance by $99,000, and a relief application addressed part of the accumulated interest.
Case Study 2 · Records and systems rebuilt
18 Months Reconciled And $8,500 Of Input Tax Recovered — US-Bound Exporter, Kelowna
Client: A manufacturer exporting to the US · Where: Kelowna, British Columbia · Engagement: 10 weeks, fixed fee
Months reconciled18
Input tax recovered$8,500
Close time7 days
The situation — A manufacturer exporting to the US, Kelowna, British Columbia
Nothing reconciled at a manufacturer exporting to the US in Kelowna, British Columbia. Every filing started with 18 months of cleanup. The file was carrying a commercial property purchase closed on the assumption no tax applied because the vendor was not registered.
What we did for A manufacturer exporting to the US, Kelowna, British Columbia
We rebuilt from source rather than correcting on top of the existing file. We rebuilt the sales ledger by customer province and applied the correct place-of-supply rate to each stream. We filed corrected returns before the CRA opened a review. Then we set the routine that keeps it clean.
The result — A manufacturer exporting to the US, Kelowna, British Columbia
18 months reconciled to the bank. The close now takes 7 days, and $8,500 of previously unclaimable input tax was recovered in the process.
Case Study 3 · CRA review defended
$97,000 Proposed Adjustment Withdrawn In Full — Freight Brokerage, London
The situation — A freight brokerage, London, Ontario
A freight brokerage in London, Ontario received a proposal letter opening a review of input tax credit review. The CRA had identified nil periods left unfiled, which held up the refund on the one period that mattered. It proposed an adjustment of $97,000, with 30 days to respond.
What we did for A freight brokerage, London, Ontario
We treated the response as an evidence exercise rather than an argument. We assembled the export documentation, restored zero-rating on the qualifying sales, and reduced the proposed assessment. We then indexed every supporting document against the specific line the auditor had questioned.
The result — A freight brokerage, London, Ontario
The proposed adjustment was withdrawn in full — all $97,000 of it. The file closed in 5 weeks with no change to the assessed amounts and no penalty.
Case Study 4 · Structure rebuilt
Corporate Structure Rebuilt For $69,000 Of Annual Savings — Restaurant Group, Calgary
Client: A restaurant group · Where: Calgary, Alberta · Engagement: 5 weeks, fixed fee
Saving per year$69,000
DocumentationComplete
Transfer basisRollover
The situation — A restaurant group, Calgary, Alberta
The structure at a restaurant group in Calgary, Alberta dated from years earlier. It had been set up for a business that no longer existed. HST charged at the home-province rate on sales into four different provinces had become expensive.
What we did for A restaurant group, Calgary, Alberta
We brought the nil and missing periods current so the account was clean before the refund claim was filed. The reorganisation used the rollover provisions rather than a taxable transfer, so no tax fell due on the restructuring itself.
The result — A restaurant group, Calgary, Alberta
$69,000 of annual saving, achieved on a tax-deferred basis. The minute book, elections and valuations are all in the file.
Case Study 5 · Cash and remittance control
$150,000 Of Working Capital Freed From The Tax Cycle — Used-Equipment Dealer, Kitchener
The situation — A used-equipment dealer, Kitchener, Ontario
A used-equipment dealer in Kitchener, Ontario was profitable on paper and short of cash every month. A registration threshold crossed nine months before anyone registered explained most of the gap.
What we did for A used-equipment dealer, Kitchener, Ontario
We backdated the registration to the date the business stopped being a small supplier, remitted the tax owing, and applied for relief on the penalty portion. We also built a thirteen-week cash view so tax payments stopped competing with payroll for the same dollars.
The result — A used-equipment dealer, Kitchener, Ontario
$150,000 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 6 · Missed incentive claimed
$59,000 Credit Claim Filed And Accepted Without Adjustment — Interprovincial Marketing Agency, Ottawa
Client: A marketing agency billing outside its home province · Where: Ottawa, Ontario · Engagement: 4 weeks, fixed fee
Claim value$59,000
AcceptedWithout adjustment
RepeatableAnnually
The situation — A marketing agency billing outside its home province, Ottawa, Ontario
A marketing agency billing outside its home province in Ottawa, Ontario assumed the credits did not apply to a business its size. Input tax credits claimed on the exempt side of a mixed-supply business meant they had applied all along.
What we did for A marketing agency billing outside its home province, Ottawa, Ontario
We identified the qualifying activity and built the documentation to support it. Then we filed the section 156 election for the related registrants, so supplies between them stopped carrying tax that served no purpose but cash-flow drag.
The result — A marketing agency billing outside its home province, Ottawa, Ontario
$59,000 recovered. Because the eligibility analysis is on file, the same claim can be repeated each year with a fraction of the effort.
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.
