6 worked Separation and Divorce Tax 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 separation and divorce tax review work, not a specific client's file.
Case Study 1 · Planning that cut the bill
$49,000 Saved By Correcting What Prior Filings Had Missed — Self-Employed Consultant, Red Deer
Client: A self-employed consultant · Where: Red Deer, Alberta · Engagement: 3 weeks, fixed fee
Saving identified$49,000
RecurringYes
Positions documentedAll
The situation — A self-employed consultant, Red Deer, Alberta
A self-employed consultant in Red Deer, Alberta asked for a second opinion on separation and divorce tax review. That followed three years of rising tax. The review found years of small donation receipts claimed one at a time instead of pooled onto a single return.
What we did for A self-employed consultant, Red Deer, Alberta
We built the comparison first: current structure against two alternatives. Then we obtained the signed T2200 and rebuilt the employment-expense claim on the prescribed form with the supporting records attached to the file.
The result — A self-employed consultant, Red Deer, Alberta
First-year saving of $49,000, with the same benefit recurring. Every position taken is documented and supported in the file.
Case Study 2 · Deadline rescue
11-Week Turnaround Beat The Deadline And Saved $38,000 — First-Time Home Buyer, Edmonton
Client: A first-time home buyer · Where: Edmonton, Alberta · Engagement: 11 weeks, fixed fee
Late-filing penalty avoided$38,000
Filed with9 days to spare
Next yearPapers ready
The situation — A first-time home buyer, Edmonton, Alberta
A first-time home buyer in Edmonton, Alberta was weeks away from the deadline for separation and divorce tax review. Behind that sat foreign accounts that had crossed the T1135 threshold two years earlier. The exposure if the date slipped was around $38,000.
What we did for A first-time home buyer, Edmonton, Alberta
We recalculated the instalments on the current year’s expected income rather than the prior year’s, which stopped the instalment interest from growing. The filing went in complete rather than provisional, so there was no amended return to follow.
The result — A first-time home buyer, Edmonton, Alberta
Filed with 9 days to spare. $38,000 in late-filing penalties avoided, and the working papers are ready for the following year.
Case Study 3 · Backlog brought current
4 Years Filed, $130,000 Removed From The Assessed Balance — Student Filer, Victoria
Client: A full-time student with tuition credits and part-time earnings · Where: Victoria, British Columbia · Engagement: 4 weeks, fixed fee
Years filed4
Assessed balance removed$130,000
CollectionsStopped
The situation — A full-time student with tuition credits and part-time earnings, Victoria, British Columbia
A full-time student with tuition credits and part-time earnings in Victoria, British Columbia had not filed for 4 years. The CRA had issued arbitrary assessments. The business was carrying a rental property reported without any capital cost allowance analysis. That came on top of a growing interest balance.
What we did for A full-time student with tuition credits and part-time earnings, Victoria, British Columbia
We started with the oldest year and worked forward so each year's closing balances fed the next. We pulled the full slip history from the CRA record, refiled the affected years by adjustment request, and recovered the credits that had been missed. We filed the years in sequence rather than all at once.
The result — A full-time student with tuition credits and part-time earnings, Victoria, British Columbia
Every year is now filed and assessed on actual figures. The notional assessments were vacated and $130,000 of the estimated balance came off, with a payment arrangement covering the rest.
Case Study 4 · CRA review defended
$13,500 Proposed Adjustment Withdrawn In Full — Two-Income Landlord Household, Ottawa
Client: A two-income household with rental property · Where: Ottawa, Ontario · Engagement: 7 weeks, fixed fee
Adjustment withdrawn$13,500
File closed in7 weeks
Penalties assessedNone
The situation — A two-income household with rental property, Ottawa, Ontario
A two-income household with rental property in Ottawa, Ontario received a proposal letter opening a review of separation and divorce tax review. The CRA had identified three years of returns filed without the slips that had been mailed to an old address. It proposed an adjustment of $13,500, with 30 days to respond.
What we did for A two-income household with rental property, Ottawa, Ontario
We treated the response as an evidence exercise rather than an argument. We reset the medical expense claim window, transferred credits between spouses, and applied the tuition and disability amounts to the return that used them. We then indexed every supporting document against the specific line the auditor had questioned.
The result — A two-income household with rental property, Ottawa, Ontario
The proposed adjustment was withdrawn in full — all $13,500 of it. The file closed in 7 weeks with no change to the assessed amounts and no penalty.
Client: An employee with foreign investment accounts · Where: Windsor, Ontario · Engagement: 3 weeks, fixed fee
Overpayment refunded$25,000
Late remittances sinceZero
ScheduleAutomated
The situation — An employee with foreign investment accounts, Windsor, Ontario
Remittances at an employee with foreign investment accounts in Windsor, Ontario were consistently late by a few days. That was enough to trigger penalties every quarter. Behind it sat employment expenses claimed with no signed T2200 from the employer to support them.
What we did for An employee with foreign investment accounts, Windsor, Ontario
We carried the capital loss back against gains reported in the prior three years and generated a refund rather than a carry-forward balance. Then we moved the remittance dates into a scheduled process rather than a monthly decision.
The result — An employee with foreign investment accounts, Windsor, Ontario
Penalties stopped from the following remittance onwards, and $25,000 of overpaid instalments was refunded.
Case Study 6 · Objection and relief
Desk-Review Assessment Of $65,000 Vacated — Disability Amount Claimant, Winnipeg
Client: A taxpayer claiming a dependant's transferred disability amount · Where: Winnipeg, Manitoba · Engagement: 10 weeks, fixed fee
Assessment vacated$65,000
Supporting recordsNow on file
AccountCleared
The situation — A taxpayer claiming a dependant's transferred disability amount, Winnipeg, Manitoba
A taxpayer claiming a dependant's transferred disability amount in Winnipeg, Manitoba was carrying $65,000 of penalties and interest. The charges arose from a home sale never reported on the basis that the gain was exempt anyway. Much of that amount accumulated during a period the CRA itself had delayed.
What we did for A taxpayer claiming a dependant's transferred disability amount, Winnipeg, Manitoba
We filed the outstanding T1135 disclosures under the voluntary disclosure route before the CRA raised them. We framed the relief application on the specific grounds the CRA guidelines recognise rather than on general hardship.
The result — A taxpayer claiming a dependant's transferred disability amount, Winnipeg, Manitoba
The assessment was vacated. $65,000 came off the account, and the documentation now on file makes the same position straightforward to defend next time.
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.
