6 worked Restricted-Fund Accounting 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 restricted-fund accounting work, not a specific client's file.
Case Study 1 · Objection and relief
Notice Of Objection Allowed In Full, $42,000 Reversed — Grant-Funded Arts Organisation, Brampton
Client: An arts organisation with grant funding · Where: Brampton, Ontario · Engagement: 5 weeks, fixed fee
Amount reversed$42,000
ObjectionAllowed in full
Account balanceNil
The situation — An arts organisation with grant funding, Brampton, Ontario
An arts organisation with grant funding in Brampton, Ontario had been reassessed for $42,000. 6 days were left on the objection deadline. The reassessment rested on restricted grant funds recognised as revenue in the year received rather than as spent.
What we did for An arts organisation with grant funding, Brampton, Ontario
We filed the objection inside the deadline with a complete submission rather than a placeholder. Alongside it, we reclassified restricted contributions under the deferral method so revenue matched the year the funds were actually spent.
The result — An arts organisation with grant funding, Brampton, Ontario
The appeals officer allowed the objection in full. $42,000 was reversed and the account returned to a nil balance.
Case Study 2 · Missed incentive claimed
$26,000 In Credits Claimed That Prior Filings Had Missed — Grant-Making Foundation, Toronto
Client: A foundation making grants · Where: Toronto, Ontario · Engagement: 7 weeks, fixed fee
Credits claimed$26,000
Years adjusted7
Review outcomeNo adjustment
The situation — A foundation making grants, Toronto, Ontario
A foundation making grants in Toronto, Ontario had been filing for 7 years. In that time, the incentives its activity qualified for were never claimed. Behind that sat tax receipts issued for two years by an organisation that was registered only as a non-profit.
What we did for A foundation making grants, Toronto, Ontario
We tested each activity against the eligibility criteria rather than the description on the invoice. Then we separated the charitable program activity from the revenue-generating activity in the accounts, so each was reported on the schedule it belonged in.
The result — A foundation making grants, Toronto, Ontario
$26,000 in credits claimed, with the open prior years adjusted as well. The claim passed review without adjustment.
Case Study 3 · CRA review defended
$134,000 Proposed Adjustment Withdrawn In Full — First-Time Information Filer, London
Client: A non-profit that has never filed an information return · Where: London, Ontario · Engagement: 8 weeks, fixed fee
Adjustment withdrawn$134,000
File closed in8 weeks
Penalties assessedNone
The situation — A non-profit that has never filed an information return, London, Ontario
A non-profit that has never filed an information return in London, Ontario received a proposal letter opening a review of restricted-fund accounting. The CRA had identified surplus accumulating year after year with no resolution recording what it was being held for. It proposed an adjustment of $134,000, with 30 days to respond.
What we did for A non-profit that has never filed an information return, London, Ontario
We treated the response as an evidence exercise rather than an argument. We stopped the receipting immediately and wrote to donors setting out which contributions were and were not eligible for a credit. We then indexed every supporting document against the specific line the auditor had questioned.
The result — A non-profit that has never filed an information return, London, Ontario
The proposed adjustment was withdrawn in full — all $134,000 of it. The file closed in 8 weeks with no change to the assessed amounts and no penalty.
Case Study 4 · Records and systems rebuilt
Books Rebuilt From Source, $15,500 In Unclaimed Input Tax Found — Community Sports Association, Guelph
Client: A community sports association · Where: Guelph, Ontario · Engagement: 6 weeks, fixed fee
Unclaimed tax found$15,500
Records rebuilt10 months
ProcessDocumented
The situation — A community sports association, Guelph, Ontario
A community sports association in Guelph, Ontario could not answer basic questions about its own numbers. GST/HST paid on everything with no public service body rebate ever claimed sat between the bank statements and the ledger.
What we did for A community sports association, Guelph, Ontario
We brought the T3010 filings current, corrected the prior-year schedules, and set an internal deadline 90 days after year-end so the filing stopped being late. We then documented the process so the work does not depend on any one person remembering how it was done.
The result — A community sports association, Guelph, Ontario
Records rebuilt and reconciled, $15,500 recovered in input tax credits that the old file could not support, and a documented monthly process now in place.
Case Study 5 · Deadline rescue
$86,000 Late-Filing Penalty Cancelled On Relief Application — Member Association, Halifax
Client: A professional member association · Where: Halifax, Nova Scotia · Engagement: 4 weeks, fixed fee
Penalty cancelled$86,000
Relief applicationGranted
ReturnAccepted as filed
The situation — A professional member association, Halifax, Nova Scotia
A professional member association in Halifax, Nova Scotia had already missed one deadline and was about to miss a second. Behind it sat a disbursement quota shortfall discovered during a CRA charity audit. A penalty of $86,000 was accruing.
What we did for A professional member association, Halifax, Nova Scotia
We split the work into what had to happen before the deadline and what could follow it. Then we papered the grant with written accountability terms, reporting milestones and a right to recover anything unspent.
The result — A professional member association, Halifax, Nova Scotia
The outstanding return was accepted as filed, and the taxpayer relief application cancelled $86,000 of the penalty already assessed on the earlier year.
Client: An environmental charity with restricted funds · Where: Barrie, Ontario · Engagement: 11 weeks, fixed fee
Overpayment refunded$147,000
Late remittances sinceZero
ScheduleAutomated
The situation — An environmental charity with restricted funds, Barrie, Ontario
Remittances at an environmental charity with restricted funds in Barrie, Ontario were consistently late by a few days. That was enough to trigger penalties every quarter. Behind it sat program funds granted to a group that was not a qualified donee, with nothing on file about how the money was to be used.
What we did for An environmental charity with restricted funds, Barrie, Ontario
We calculated and claimed the public service body rebate for every open period, recovering tax the organisation had been absorbing. Then we moved the remittance dates into a scheduled process rather than a monthly decision.
The result — An environmental charity with restricted funds, Barrie, Ontario
Penalties stopped from the following remittance onwards, and $147,000 of overpaid instalments was refunded.
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.
