6 Sole Proprietorship Tax Filing 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 sole proprietorship tax filing work, not a general example.
Case Study 1 · Missed incentive claimed
$105,000 Credit Claim Filed And Accepted Without Adjustment — Partnership with a Corporate, Regina
Client: A partnership with a corporate partner · Where: Regina, Saskatchewan · Engagement: 3 weeks, fixed fee
Claim value$105,000
AcceptedWithout adjustment
RepeatableAnnually
The situation
A partnership with a corporate partner in Regina, Saskatchewan assumed the credits did not apply to a business its size. Business income reported entirely on one spouse’s return despite shared operations meant they had applied all along.
What we did
We identified the qualifying activity, built the documentation to support it, and filed the outstanding T5013 returns with full partner allocations and requested penalty relief on the basis of the first-time nature of the failure.
The result
$105,000 recovered. Because the eligibility analysis is on file, the same claim can be repeated each year with a fraction of the effort.
Case Study 2 · Backlog brought current
Collections Halted And $14,500 Cut From A 3-Year Backlog — Husband-And-Wife Retail Partnership, Moncton
Client: A husband-and-wife retail partnership · Where: Moncton, New Brunswick · Engagement: 9 weeks, fixed fee
Balance reduced by$14,500
Backlog cleared3 years
CollectionsHalted
The situation
By the time a husband-and-wife retail partnership in Moncton, New Brunswick called, 3 years were outstanding and the CRA had assessed on estimates. Underneath it sat a partnership that crossed the T5013 threshold two years before anyone noticed.
What we did
We reconstructed the records year by year and filed the section 85 election with correct elected amounts and rolled the assets in without a taxable disposition. Each filing replaced an arbitrary assessment with a real one.
The result
The account is current. Filing on real numbers rather than CRA estimates reduced the balance by $14,500, and a relief application addressed part of the accumulated interest.
Case Study 3 · Objection and relief
Desk-Review Assessment Of $76,000 Vacated — Farming Partnership, Toronto
A farming partnership in Toronto, Ontario was carrying $76,000 of penalties and interest arising from partner draws that had pushed one partner’s adjusted cost base negative, much of it accumulated during a period the CRA itself had delayed.
What we did
We rewrote the partnership allocation to match how the practice actually operated, effective for the following fiscal year and framed the relief application on the specific grounds the CRA guidelines recognise rather than on general hardship.
The result
The assessment was vacated. $76,000 came off the account, and the documentation now on file makes the same position straightforward to defend next time.
Case Study 4 · Records and systems rebuilt
Month-End Close Cut From 6 Weeks To 4 Days — Freelance Developer, Ottawa
The accounting file at a freelance developer in Ottawa, Ontario was built on a profit split applied in practice that the written agreement did not support. The year-end had taken 6 weeks each of the last three years.
What we did
We restructured the draw policy so no partner’s adjusted cost base went negative again, and reported the deemed gain correctly for the year it arose and moved the reconciliations into the monthly cycle, so the year-end stopped being a rebuild.
The result
The file reconciles. Month-end closes in 4 days instead of 6 weeks, and the year-end is a review rather than a reconstruction.
Case Study 5 · Planning that cut the bill
$55,000 Cut From The Annual Tax Bill — Two-Partner Architecture Practice, Saskatoon
Client: A two-partner architecture practice · Where: Saskatoon, Saskatchewan · Engagement: 7 weeks, fixed fee
First-year saving$55,000
RepeatsAnnually
Filing positionUnchanged in risk
The situation
A two-partner architecture practice in Saskatoon, Saskatchewan was compliant but paying more than it needed to. The prior year had been filed correctly and still left business income reported entirely on one spouse’s return despite shared operations on the table.
What we did
We modelled the current position against the alternatives before changing anything, then filed the outstanding T5013 returns with full partner allocations and requested penalty relief on the basis of the first-time nature of the failure.
The result
The change saved $55,000 in the first year and repeats annually. Nothing about the filings became more aggressive; the position is simply the one the rules already allowed.
Case Study 6 · CRA review defended
$48,000 Proposed Adjustment Withdrawn In Full — Three-Partner Medical Clinic, Kitchener
Client: A three-partner medical clinic · Where: Kitchener, Ontario · Engagement: 10 weeks, fixed fee
Adjustment withdrawn$48,000
File closed in10 weeks
Penalties assessedNone
The situation
A three-partner medical clinic in Kitchener, Ontario received a proposal letter opening a review of sole proprietorship tax filing. The CRA had identified an incorporation completed without the section 85 election, triggering an unnecessary gain and proposed an adjustment of $48,000, with 30 days to respond.
What we did
We treated the response as an evidence exercise rather than an argument. We filed the section 85 election with correct elected amounts and rolled the assets in without a taxable disposition, then indexed every supporting document against the specific line the auditor had questioned.
The result
The proposed adjustment was withdrawn in full — all $48,000 of it. The file closed in 10 weeks with no change to the assessed amounts and no penalty.
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.
