6 Termination and Severance Payroll 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 termination and severance payroll work, not a general example.
Case Study 1 · Sale and succession
$435,000 Sheltered By The Lifetime Capital Gains Exemption — Logistics Operator with Drivers, Kelowna
Client: A logistics operator with drivers in three provinces · Where: Kelowna, British Columbia · Engagement: 7 weeks, fixed fee
Gain sheltered$435,000
ClosingOn schedule
Share qualificationMet
The situation
A logistics operator with drivers in three provinces in Kelowna, British Columbia had an offer on the table and 13 months to close. The shares did not qualify for the capital gains exemption, and a minute book with no resolutions behind a decade of dividends was part of the reason.
What we did
We purified the corporation so the shares met the qualifying tests, then reconciled the payroll register, general ledger and T4 summary to the cent, then filed the amended slips well ahead of the closing date.
The result
The sale closed on schedule with $435,000 sheltered by the lifetime capital gains exemption across the shareholders.
Case Study 2 · Records and systems rebuilt
Month-End Close Cut From 11 Weeks To 4 Days — Security Services Contractor, London
The accounting file at a security services contractor in London, Ontario was built on a director facing a personal assessment for unremitted source deductions. The year-end had taken 11 weeks each of the last three years.
What we did
We moved the account to the correct remitter frequency, caught up the arrears, and filed a taxpayer relief request that cancelled the bulk of the penalty 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 11 weeks, and the year-end is a review rather than a reconstruction.
Case Study 3 · Missed incentive claimed
$67,000 Credit Claim Filed And Accepted Without Adjustment — Construction Firm with Union, Calgary
Client: A construction firm with union and non-union crews · Where: Calgary, Alberta · Engagement: 4 weeks, fixed fee
Claim value$67,000
AcceptedWithout adjustment
RepeatableAnnually
The situation
A construction firm with union and non-union crews in Calgary, Alberta assumed the credits did not apply to a business its size. Company vehicles used personally with no logbook and no taxable benefit reported meant they had applied all along.
What we did
We identified the qualifying activity, built the documentation to support it, and reviewed each contractor against the CRA’s control and integration tests, converted those who met the employment tests, and priced the transition before it was forced by a ruling.
The result
$67,000 recovered. Because the eligibility analysis is on file, the same claim can be repeated each year with a fraction of the effort.
A 30-employee manufacturer in Kitchener, Ontario had already missed one deadline and was about to miss a second. Behind it sat company vehicles used personally with no logbook and no taxable benefit reported, and a penalty of $130,000 was accruing.
What we did
We split the work into what had to happen before the deadline and what could follow it, then reconstructed vehicle logbooks, calculated the standby charge and operating benefit properly, and amended the affected T4s.
The result
The outstanding return was accepted as filed, and the taxpayer relief application cancelled $130,000 of the penalty already assessed on the earlier year.
Case Study 5 · CRA review defended
Audit Defence Closed In 6 Weeks, $124,000 Cleared — Landscaping Company with Seasonal, Ottawa
Client: A landscaping company with seasonal staff · Where: Ottawa, Ontario · Engagement: 6 weeks, fixed fee
Proposed tax cleared$124,000
Review duration6 weeks
OutcomeNo change
The situation
A landscaping company with seasonal staff in Ottawa, Ontario was selected for review after long-term contractors who met every test for employment showed up in the CRA's automated matching. The proposed adjustment on termination and severance payroll came to $124,000.
What we did
We reconciled the payroll register, general ledger and T4 summary to the cent, then filed the amended slips. Every figure in the response traced to a source record the auditor could verify without asking a second question.
The result
The review closed with no change. $124,000 of proposed tax came off the table, and the documentation now in place makes the next review a short one.
Case Study 6 · Objection and relief
Notice Of Objection Allowed In Full, $110,000 Reversed — Retail Chain Across Two, Moncton
Client: A retail chain across two provinces · Where: Moncton, New Brunswick · Engagement: 7 weeks, fixed fee
Amount reversed$110,000
ObjectionAllowed in full
Account balanceNil
The situation
A retail chain across two provinces in Moncton, New Brunswick had been reassessed for $110,000 and had 13 days left on the objection deadline. The reassessment rested on remittances still going out monthly after the business had moved to the accelerated threshold.
What we did
We filed the objection inside the deadline with a complete submission rather than a placeholder, and moved the account to the correct remitter frequency, caught up the arrears, and filed a taxpayer relief request that cancelled the bulk of the penalty.
The result
The appeals officer allowed the objection in full. $110,000 was reversed and the account returned to a nil balance.
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.
