6 worked Intercompany Transaction 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 intercompany transaction review work, not a specific client's file.
Case Study 1 · CRA review defended
$105,000 Reassessment Reduced To Nil On Review — US Pension Recipient, London
Client: A Canadian resident receiving US pension income · Where: London, Ontario · Engagement: 3 weeks, fixed fee
Reassessment reduced toNil
Tax protected$105,000
Prior filingsUndisturbed
The situation — A Canadian resident receiving US pension income, London, Ontario
A review notice arrived at a Canadian resident receiving US pension income in London, Ontario, covering intercompany transaction review for two tax years. The auditor's working position was an adjustment of $105,000. It was driven by a US LLC taxed as a corporation in Canada, producing double tax on the same income.
What we did for A Canadian resident receiving US pension income, London, Ontario
Rather than negotiate, we rebuilt the record. We restructured the US holding so the Canadian and US characterisations aligned, ending the double taxation going forward. We then submitted a point-by-point response that answered each proposed adjustment with the document behind it.
The result — A Canadian resident receiving US pension income, London, Ontario
The auditor accepted the documented position and closed the review without adjustment, protecting $105,000 and leaving the prior filings undisturbed.
Case Study 2 · Sale and succession
Intergenerational Transfer Completed With $580,000 Deferred — Mid-Year Emigrant, Windsor
Client: An emigrant who left Canada mid-year · Where: Windsor, Ontario · Engagement: 8 weeks, fixed fee
Tax deferred$580,000
TransferCompleted
RecordsReview-ready
The situation — An emigrant who left Canada mid-year, Windsor, Ontario
A generational transfer at an emigrant who left Canada mid-year in Windsor, Ontario had been discussed for years without a plan. A shareholder loan balance that would have been picked up as income on closing meant the transfer as contemplated would have been fully taxable.
What we did for An emigrant who left Canada mid-year, Windsor, Ontario
We filed the outstanding T1135 disclosures through the Voluntary Disclosures Program, which eliminated the penalty exposure entirely. We sequenced the steps so each one was complete and documented before the next depended on it.
The result — An emigrant who left Canada mid-year, Windsor, Ontario
$580,000 of tax was deferred through the transfer, and the successor generation took over a corporation whose records stood up to review.
Case Study 3 · Records and systems rebuilt
Month-End Close Cut From 12 Weeks To 5 Days — US Rental Owner, Calgary
Client: A Canadian resident with a US rental property · Where: Calgary, Alberta · Engagement: 5 weeks, fixed fee
Close time before12 weeks
Close time after5 days
Year-endReview, not rebuild
The situation — A Canadian resident with a US rental property, Calgary, Alberta
The accounting file at a Canadian resident with a US rental property in Calgary, Alberta had a weak foundation. It was built on a departure year filed as a normal resident return with no deemed disposition reported. The year-end had taken 12 weeks each of the last three years.
What we did for A Canadian resident with a US rental property, Calgary, Alberta
We aligned the Canadian and US reporting of the same income so the foreign tax credit claim carried support on both returns. We also moved the reconciliations into the monthly cycle, so the year-end stopped being a rebuild.
The result — A Canadian resident with a US rental property, Calgary, Alberta
The file reconciles. Month-end closes in 5 days instead of 12 weeks, and the year-end is a review rather than a reconstruction.
Case Study 4 · Planning that cut the bill
$28,000 Cut From The Annual Tax Bill — Canadian on US Payroll, Surrey
Client: A Canadian with a US employer · Where: Surrey, British Columbia · Engagement: 7 weeks, fixed fee
First-year saving$28,000
RepeatsAnnually
Filing positionUnchanged in risk
The situation — A Canadian with a US employer, Surrey, British Columbia
A Canadian with a US employer in Surrey, British Columbia was compliant but paying more than it needed to. The prior year had been filed correctly. It still left foreign accounts that had passed the $100,000 T1135 threshold three years earlier on the table.
What we did for A Canadian with a US employer, Surrey, British Columbia
We modelled the current position against the alternatives before changing anything. Then we reconstructed the day count on both sides of the border and documented the residency and treaty position before either revenue authority asked.
The result — A Canadian with a US employer, Surrey, British Columbia
The change saved $28,000 in the first year and repeats annually. Nothing about the filings became more aggressive. The position is simply the one the rules already allowed.
Case Study 5 · Backlog brought current
5 Years Filed, $137,000 Removed From The Assessed Balance — US Citizen in Canada, Kitchener
Client: A US citizen living in Canada · Where: Kitchener, Ontario · Engagement: 10 weeks, fixed fee
Years filed5
Assessed balance removed$137,000
CollectionsStopped
The situation — A US citizen living in Canada, Kitchener, Ontario
A US citizen living in Canada in Kitchener, Ontario had not filed for 5 years. The CRA had issued arbitrary assessments. The business was carrying invoices paid to a non-resident consultant working on site in Canada with no Regulation 105 withholding taken. That came on top of a growing interest balance.
What we did for A US citizen living in Canada, Kitchener, Ontario
We started with the oldest year and worked forward so each year's closing balances fed the next. We applied the treaty rate to the dividend withholding, filed the NR4 return, and remitted the shortfall before the CRA assessed the payer for it. We filed the years in sequence rather than all at once.
The result — A US citizen living in Canada, Kitchener, Ontario
Every year is now filed and assessed on actual figures. The notional assessments were vacated and $137,000 of the estimated balance came off, with a payment arrangement covering the rest.
Case Study 6 · Objection and relief
$68,000 Of Penalties And Interest Cancelled On Relief — Inbound Assignee, Guelph
Client: An inbound transferee on assignment · Where: Guelph, Ontario · Engagement: 9 weeks, fixed fee
Penalties and interest cancelled$68,000
Relief groundsAccepted
AssessmentAdjusted to filed position
The situation — An inbound transferee on assignment, Guelph, Ontario
An assessment of $68,000 landed at an inbound transferee on assignment in Guelph, Ontario following a desk review. It turned on 25% withholding on gross Canadian rent where a section 216 election would have taxed only the net. The auditor had not seen the records behind it.
What we did for An inbound transferee on assignment, Guelph, Ontario
We registered the payer for a non-resident withholding account, remitted the Regulation 105 amounts due, and applied for waivers covering the rest of the contract. We then set out the legislative basis for the position alongside the documents supporting it.
The result — An inbound transferee on assignment, Guelph, Ontario
$68,000 of penalties and interest was cancelled under the taxpayer relief provisions, and the underlying assessment was adjusted to match the filed position.
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.
