6 Shareholder Loan Audit Support tax and accounting engagements in full — what the client came to us with, what we did, and what it was worth. Each one is specific to shareholder loan audit support work, not a general example.
Case Study 1 · Sale and succession
$185,000 Sheltered By The Lifetime Capital Gains Exemption — Business Owner with a, Guelph
Client: A business owner with a director liability assessment · Where: Guelph, Ontario · Engagement: 10 weeks, fixed fee
Gain sheltered$185,000
ClosingOn schedule
Share qualificationMet
The situation
A business owner with a director liability assessment in Guelph, Ontario had an offer on the table and 26 months to close. The shares did not qualify for the capital gains exemption, and passive assets sitting inside the operating company, disqualifying the shares was part of the reason.
What we did
We purified the corporation so the shares met the qualifying tests, then assembled the contemporaneous records, filed a structured response to each proposed adjustment with the supporting documents indexed, and had the proposal withdrawn well ahead of the closing date.
The result
The sale closed on schedule with $185,000 sheltered by the lifetime capital gains exemption across the shareholders.
Case Study 2 · Backlog brought current
3 Years Filed, $33,500 Removed From The Assessed Balance — Company Facing a Payroll, Ottawa
Client: A company facing a payroll trust examination · Where: Ottawa, Ontario · Engagement: 8 weeks, fixed fee
Years filed3
Assessed balance removed$33,500
CollectionsStopped
The situation
A company facing a payroll trust examination in Ottawa, Ontario had not filed for 3 years. The CRA had issued arbitrary assessments, and the business was carrying six years of unfiled corporate and personal returns and an active collections file on top of a growing interest balance.
What we did
We started with the oldest year and worked forward so each year's closing balances fed the next. We traced each unexplained deposit to its source — loans, transfers between accounts, an insurance settlement — and reduced the net-worth assessment accordingly, filing the years in sequence rather than all at once.
The result
Every year is now filed and assessed on actual figures. The notional assessments were vacated and $33,500 of the estimated balance came off, with a payment arrangement covering the rest.
Case Study 3 · Structure rebuilt
Holding Structure Added, $16,500 Saved Annually — Family Business Under a, Burnaby
Client: A family business under a related-party review · Where: Burnaby, British Columbia · Engagement: 10 weeks, fixed fee
Annual saving$16,500
ReorganisationTax-neutral
StructureMatches operations
The situation
A family business under a related-party review in Burnaby, British Columbia was carrying a net-worth assessment built on unexplained deposits that were actually loan proceeds, and every option for fixing it ran through a reorganisation that had to be done without triggering tax.
What we did
Working with the client's lawyer, we brought every outstanding return current, then negotiated a payment arrangement that stopped the collections action and prepared the elections, resolutions and valuations the structure needed to stand up.
The result
The structure now matches the business. Annual saving of $16,500, and the reorganisation itself was tax-neutral.
Case Study 4 · Objection and relief
$57,000 Of Penalties And Interest Cancelled On Relief — Restaurant Under a Net-Worth, Moncton
Client: A restaurant under a net-worth audit · Where: Moncton, New Brunswick · Engagement: 5 weeks, fixed fee
Penalties and interest cancelled$57,000
Relief groundsAccepted
AssessmentAdjusted to filed position
The situation
An assessment of $57,000 landed at a restaurant under a net-worth audit in Moncton, New Brunswick following a desk review. The auditor had not seen the records behind a director liability assessment for a corporation that had already stopped operating.
What we did
We filed the disclosure through the Voluntary Disclosures Program before contact, which removed the gross-negligence penalty entirely, then set out the legislative basis for the position alongside the documents supporting it.
The result
$57,000 of penalties and interest was cancelled under the taxpayer relief provisions, and the underlying assessment was adjusted to match the filed position.
Case Study 5 · Deadline rescue
9-Week Turnaround Beat The Deadline And Saved $123,000 — Taxpayer with Eight Years, Vancouver
Client: A taxpayer with eight years of unfiled returns · Where: Vancouver, British Columbia · Engagement: 9 weeks, fixed fee
Late-filing penalty avoided$123,000
Filed with24 days to spare
Next yearPapers ready
The situation
With the deadline for shareholder loan audit support weeks away, a taxpayer with eight years of unfiled returns in Vancouver, British Columbia was carrying an objection deadline that had passed with no extension applied for. The exposure if the date slipped was around $123,000.
What we did
We assembled the contemporaneous records, filed a structured response to each proposed adjustment with the supporting documents indexed, and had the proposal withdrawn. The filing went in complete rather than provisional, so there was no amended return to follow.
The result
Filed with 24 days to spare. $123,000 in late-filing penalties avoided, and the working papers are ready for the following year.
Case Study 6 · Records and systems rebuilt
Books Rebuilt From Source, $20,000 In Unclaimed Input Tax Found — Professional Under a Lifestyle, Halifax
Client: A professional under a lifestyle audit · Where: Halifax, Nova Scotia · Engagement: 3 weeks, fixed fee
Unclaimed tax found$20,000
Records rebuilt13 months
ProcessDocumented
The situation
A professional under a lifestyle audit in Halifax, Nova Scotia could not answer basic questions about its own numbers, because a proposal letter with a 30-day response window and no supporting records assembled sat between the bank statements and the ledger.
What we did
We traced each unexplained deposit to its source — loans, transfers between accounts, an insurance settlement — and reduced the net-worth assessment accordingly, then documented the process so the work does not depend on any one person remembering how it was done.
The result
Records rebuilt and reconciled, $20,000 recovered in input tax credits that the old file could not support, and a documented monthly process now in place.
Reviewed for the 2025 tax year by Udit Gupta, Certified Tax Accountant. Figures describe representative engagements of this type; outcomes depend on your own facts. Client names and identifying details are omitted for confidentiality.
