6 worked Sales Tax Reconciliation 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 sales tax reconciliation work, not a specific client's file.
Case Study 1 · CRA review defended
Audit Defence Closed In 3 Weeks, $15,000 Cleared — Interprovincial Marketing Agency, Vancouver
Client: A marketing agency billing outside its home province · Where: Vancouver, British Columbia · Engagement: 3 weeks, fixed fee
Proposed tax cleared$15,000
Review duration3 weeks
OutcomeNo change
The situation — A marketing agency billing outside its home province, Vancouver, British Columbia
A marketing agency billing outside its home province in Vancouver, British Columbia was selected for review. HST charged at the home-province rate on sales into four different provinces had shown up in the CRA's automated matching. The proposed adjustment on sales tax reconciliation came to $15,000.
What we did for A marketing agency billing outside its home province, Vancouver, British Columbia
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. Every figure in the response traced to a source record the auditor could verify without asking a second question.
The result — A marketing agency billing outside its home province, Vancouver, British Columbia
The review closed with no change. $15,000 of proposed tax came off the table, and the documentation now in place makes the next review a short one.
Case Study 2 · Missed incentive claimed
Incentive Review Recovered $114,000 Across 6 Open Years — Multi-Province Online Retailer, Guelph
The situation — A multi-province online retailer, Guelph, Ontario
An incentive review at a multi-province online retailer in Guelph, Ontario started from a simple question: what has never been claimed? The answer ran to 6 years. It was driven by export sales zero-rated with no shipping documentation behind them.
What we did for A multi-province online retailer, Guelph, Ontario
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. We documented eligibility to the standard a reviewer would apply rather than the standard a claim form requires.
The result — A multi-province online retailer, Guelph, Ontario
The credits produced $114,000 across the open years. The tracking now in place means the following year's claim is documented as the work happens rather than reconstructed afterwards.
Case Study 3 · Sale and succession
Intergenerational Transfer Completed With $870,000 Deferred — Mixed-Use Landlord, Windsor
Client: A residential landlord also renting commercial space · Where: Windsor, Ontario · Engagement: 3 weeks, fixed fee
Tax deferred$870,000
TransferCompleted
RecordsReview-ready
The situation — A residential landlord also renting commercial space, Windsor, Ontario
A generational transfer at a residential landlord also renting commercial space 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 A residential landlord also renting commercial space, Windsor, Ontario
We set a defensible input tax credit allocation between taxable and exempt supplies and documented the method for future filings. We sequenced the steps so each one was complete and documented before the next depended on it.
The result — A residential landlord also renting commercial space, Windsor, Ontario
$870,000 of tax was deferred through the transfer, and the successor generation took over a corporation whose records stood up to review.
Case Study 4 · Backlog brought current
$93,000 Of Arbitrary Assessments Vacated After 7 Years — Restaurant Group, Regina
Client: A restaurant group · Where: Regina, Saskatchewan · Engagement: 9 weeks, fixed fee
Arbitrary tax vacated$93,000
Years brought current7
Account statusCurrent
The situation — A restaurant group, Regina, Saskatchewan
7 years of unfiled returns had turned into notional assessments at a restaurant group in Regina, Saskatchewan. Underneath lay a registration threshold crossed nine months before anyone registered. Collections had already started.
What we did for A restaurant group, Regina, Saskatchewan
We tested the quick method against the account’s actual input tax credit history and stayed on the regular method where the credits were worth more. We then filed every outstanding year in chronological order so the CRA could vacate the notional assessments cleanly.
The result — A restaurant group, Regina, Saskatchewan
All 7 years were accepted as filed. $93,000 of arbitrarily assessed tax was vacated, collections action stopped, and the account is current for the first time in 7 years.
Case Study 5 · Structure rebuilt
Reorganisation Completed Tax-Deferred, $37,000 Saved Each Year — Cross-Border SaaS Company, Saskatoon
Client: A SaaS company with Canadian and US customers · Where: Saskatoon, Saskatchewan · Engagement: 5 weeks, fixed fee
Annual saving$37,000
Tax on reorganisationDeferred
Elections filedOn time
The situation — A SaaS company with Canadian and US customers, Saskatoon, Saskatchewan
A SaaS company with Canadian and US customers in Saskatoon, Saskatchewan had outgrown the structure it started with. A sales tax account filed annually while the CRA had moved the business to quarterly was the immediate problem. The longer-term one was that the structure blocked the next step.
What we did for A SaaS company with Canadian and US customers, Saskatoon, Saskatchewan
We mapped the current structure and modelled the target. 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 tax-deferred elections were filed on time and the supporting valuations documented.
The result — A SaaS company with Canadian and US customers, Saskatoon, Saskatchewan
The reorganisation completed without triggering tax, and the new structure saves approximately $37,000 a year while removing the exposure the old one carried.
Case Study 6 · Objection and relief
Notice Of Objection Allowed In Full, $131,000 Reversed — Exempt-Supply Clinic, Winnipeg
Client: A health clinic making exempt supplies · Where: Winnipeg, Manitoba · Engagement: 4 weeks, fixed fee
Amount reversed$131,000
ObjectionAllowed in full
Account balanceNil
The situation — A health clinic making exempt supplies, Winnipeg, Manitoba
A health clinic making exempt supplies in Winnipeg, Manitoba had been reassessed for $131,000. 15 days were left on the objection deadline. The reassessment rested on nil periods left unfiled, which held up the refund on the one period that mattered.
What we did for A health clinic making exempt supplies, Winnipeg, Manitoba
We filed the objection inside the deadline with a complete submission rather than a placeholder. Alongside it, 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.
The result — A health clinic making exempt supplies, Winnipeg, Manitoba
The appeals officer allowed the objection in full. $131,000 was reversed and the account returned to a nil balance.
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.
