6 worked Small Business Tax Planning 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 small business tax planning work, not a specific client's file.
Case Study 1 · Backlog brought current
Collections Halted And $82,000 Cut From A 4-Year Backlog — Two-Shareholder CCPC, Toronto
Client: A CCPC with two shareholders · Where: Toronto, Ontario · Engagement: 3 weeks, fixed fee
Balance reduced by$82,000
Backlog cleared4 years
CollectionsHalted
The situation — A CCPC with two shareholders, Toronto, Ontario
By the time a CCPC with two shareholders in Toronto, Ontario called, 4 years were outstanding. The CRA had assessed on estimates. Underneath it sat a distribution treated as tax-free capital dividend with no election ever filed.
What we did for A CCPC with two shareholders, Toronto, Ontario
We reconstructed the records year by year. We documented safe income before the inter-corporate dividend was paid, so subsection 55(2) had no room to recharacterise it as a gain. Each filing replaced an arbitrary assessment with a real one.
The result — A CCPC with two shareholders, Toronto, Ontario
The account is current. Filing on real numbers rather than CRA estimates reduced the balance by $82,000, and a relief application addressed part of the accumulated interest.
Case Study 2 · CRA review defended
$43,000 Proposed Adjustment Withdrawn In Full — Corporation Holding Investments, Barrie
Client: An operating company holding surplus investments · Where: Barrie, Ontario · Engagement: 11 weeks, fixed fee
Adjustment withdrawn$43,000
File closed in11 weeks
Penalties assessedNone
The situation — An operating company holding surplus investments, Barrie, Ontario
An operating company holding surplus investments in Barrie, Ontario received a proposal letter opening a review of small business tax planning. The CRA had identified retained earnings building in the operating company with no plan for extracting them. It proposed an adjustment of $43,000, with 30 days to respond.
What we did for An operating company holding surplus investments, Barrie, Ontario
We treated the response as an evidence exercise rather than an argument. We reviewed each capital cost allowance pool and set the claim at the level that kept the small business deduction fully used rather than wasted. We then indexed every supporting document against the specific line the auditor had questioned.
The result — An operating company holding surplus investments, Barrie, Ontario
The proposed adjustment was withdrawn in full — all $43,000 of it. The file closed in 11 weeks with no change to the assessed amounts and no penalty.
Client: An incorporated trades business · Where: Red Deer, Alberta · Engagement: 9 weeks, fixed fee
Overpayment refunded$123,000
Late remittances sinceZero
ScheduleAutomated
The situation — An incorporated trades business, Red Deer, Alberta
Remittances at an incorporated trades business in Red Deer, Alberta were consistently late by a few days. That was enough to trigger penalties every quarter. Behind it sat a balance-due date the owner believed was the same as the filing date.
What we did for An incorporated trades business, Red Deer, Alberta
We mapped the association rules across the group, allocated the business limit deliberately on Schedule 23, and corrected the prior year by adjustment request. Then we moved the remittance dates into a scheduled process rather than a monthly decision.
The result — An incorporated trades business, Red Deer, Alberta
Penalties stopped from the following remittance onwards, and $123,000 of overpaid instalments was refunded.
Case Study 4 · Objection and relief
Notice Of Objection Allowed In Full, $139,000 Reversed — Incorporated Consultancy, Burnaby
Client: An incorporated consultancy · Where: Burnaby, British Columbia · Engagement: 11 weeks, fixed fee
Amount reversed$139,000
ObjectionAllowed in full
Account balanceNil
The situation — An incorporated consultancy, Burnaby, British Columbia
An incorporated consultancy in Burnaby, British Columbia had been reassessed for $139,000. 16 days were left on the objection deadline. The reassessment rested on a small business limit quietly shared across three associated corporations nobody had mapped.
What we did for An incorporated consultancy, Burnaby, British Columbia
We filed the objection inside the deadline with a complete submission rather than a placeholder. Alongside it, we moved passive holdings into a separate structure so the operating company’s small business limit stopped grinding down.
The result — An incorporated consultancy, Burnaby, British Columbia
The appeals officer allowed the objection in full. $139,000 was reversed and the account returned to a nil balance.
Case Study 5 · Sale and succession
$770,000 Sheltered By The Lifetime Capital Gains Exemption — Professional Corporation, Surrey
Client: A professional corporation · Where: Surrey, British Columbia · Engagement: 5 weeks, fixed fee
Gain sheltered$770,000
ClosingOn schedule
Share qualificationMet
The situation — A professional corporation, Surrey, British Columbia
A professional corporation in Surrey, British Columbia had an offer on the table and 14 months to close. The shares did not qualify for the capital gains exemption. No valuation on file to support the price the parties had agreed was part of the reason.
What we did for A professional corporation, Surrey, British Columbia
We purified the corporation so the shares met the qualifying tests. We rebuilt the instalment schedule off the current year rather than the prior year, ending the interest accrual. All of it was done well ahead of the closing date.
The result — A professional corporation, Surrey, British Columbia
The sale closed on schedule with $770,000 sheltered by the lifetime capital gains exemption across the shareholders.
Case Study 6 · Scaling without breaking
Scaled To 32 Staff With $61,000 Of Working Capital Freed — Non-Calendar Year-End Corporation, Edmonton
Client: A corporation with a non-calendar fiscal year-end · Where: Edmonton, Alberta · Engagement: 7 weeks, fixed fee
Headcount reached32
Working capital freed$61,000
Missed deadlinesZero
The situation — A corporation with a non-calendar fiscal year-end, Edmonton, Alberta
A corporation with a non-calendar fiscal year-end in Edmonton, Alberta was growing fast, with headcount reaching 32 in eighteen months. The back office had not kept up. A loss year carried forward by default when carrying it back would have produced a refund cheque was the first thing to break.
What we did for A corporation with a non-calendar fiscal year-end, Edmonton, Alberta
We modelled salary against dividends across both the corporation and the shareholder’s personal return, then set the remuneration mix for the year. We built the compliance calendar for the size the business was becoming rather than the size it had been.
The result — A corporation with a non-calendar fiscal year-end, Edmonton, Alberta
The business reached 32 staff with no missed remittance and no late filing. $61,000 of working capital was freed in the process.
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.
