Insights
Oct 23, 2025
Mackisen
After A Denied CRA Objection 2025
Being a company director in Canada means more than running operations—it means you can be personally responsible for unpaid corporate taxes. In 2025, CRA and Revenu Québec are aggressively enforcing director’s penalties against owners and executives of corporations that fail to remit payroll deductions, GST/HST, QST, or source withholdings. These penalties can reach 100% of the amount owing, plus daily compounded interest, and can attach to your personal assets—even years after the company shuts down.
Many directors discover these penalties only when CRA freezes their personal accounts or sends a Director’s Liability Assessment Notice (DLA). By then, it’s often too late to argue that the corporation—not them—was responsible. But with the right professional representation, these penalties can often be reduced, defended, or reversed.
At Mackisen CPA Auditors Montreal, we specialize in protecting business owners and corporate directors from CRA and Revenu Québec personal liability. Our team of auditors and tax lawyers builds a legal and financial defense that proves due diligence, compliance effort, and lack of control—three key criteria that can shield you from personal exposure.
Legal and Regulatory Framework
Income Tax Act (Canada)
Section 227.1: Makes directors personally liable for unremitted source deductions (income tax, CPP, EI).
Excise Tax Act (Canada)
Section 323: Extends personal liability to unpaid GST/HST remittances.
Tax Administration Act (Quebec)
Establishes equivalent provisions for unpaid QST, payroll, and corporate source deductions.
Canada Business Corporations Act (CBCA)
Section 119: Allows CRA to pursue directors for up to six years after resignation if due diligence cannot be proven.
Mackisen builds your defense around the due diligence test—demonstrating that you acted responsibly, took all reasonable steps, and cannot be personally blamed for the corporation’s failure to remit.
Key Court Decisions
Buckingham v. The Queen (2011 FCA 142): Confirmed that directors are personally liable unless they can prove active due diligence.
Wheeldon v. The Queen (1999): CRA must show the director had effective control during the period of non-remittance.
Canada v. Corsano (2020): Directors can still be liable after resignation if CRA proves ongoing influence or oversight failure.
These precedents make one thing clear—CRA doesn’t need to prove intent, only lack of reasonable action.
Why Director’s Penalties Are a Growing Risk
In 2025, CRA’s automated enforcement systems can identify corporate delinquencies instantly, issuing Director’s Liability Assessments even without a full audit. Common triggers include:
Missed or late payroll remittances.
Unpaid GST/HST or QST filings.
Bankruptcy or corporate dissolution without CRA clearance.
Lack of financial oversight or control documentation.
Resignation not properly recorded or filed with authorities.
CRA and Revenu Québec can legally garnish wages, freeze accounts, or register liens against directors personally—making fast, professional action critical.
Mackisen’s Director’s Penalty Defense and Recovery Strategy
Immediate Case Review: Analyze all CRA/ARQ claims and confirm whether proper procedures were followed in issuing the assessment.
Due Diligence Defense: Collect documentation proving that you took reasonable steps to ensure compliance (e.g., meeting minutes, accountant correspondence, cash flow evidence).
Liability Limitation: Identify whether the debt arose after your resignation or during periods beyond your control.
Objection and Appeal Filing: File a Notice of Objection or Tax Court appeal within the statutory deadlines.
Negotiation and Settlement: Work with CRA and Revenu Québec to reduce or remove penalties based on financial hardship or lack of culpability.
Our approach combines audit expertise with legal precision—protecting your assets, reputation, and financial future.
Real Client Experience
A Montreal director received a $118,000 penalty assessment for unremitted payroll deductions after his business partner’s mismanagement. Mackisen proved that he had delegated duties responsibly and maintained oversight, leading to full dismissal of the penalty.
A Quebec manufacturing firm’s director faced personal liability for $67,000 in unremitted QST. Mackisen negotiated directly with Revenu Québec, demonstrating administrative error and achieving a 90% reduction.
Common Questions
Can CRA make me pay my company’s tax debt? Yes—if you were a director during the period of non-remittance and cannot prove due diligence.
How long am I at risk after resigning? Up to six years, unless you file a formal resignation and maintain proof of departure.
Can I be liable for GST/HST too? Absolutely. The Excise Tax Act applies the same rules for unpaid sales tax.
Can Mackisen help even after I’ve received a penalty notice? Yes—we file objections, negotiate settlements, and can appeal directly to the Tax Court of Canada if needed.
Why Mackisen
At Mackisen CPA Auditors Montreal, we defend entrepreneurs, directors, and business leaders from one of CRA’s harshest penalties. Our team of CPAs and tax lawyers builds a customized legal defense to prove your compliance and protect your personal assets from corporate tax debt.
We act fast, strategically, and discreetly—because when your name is on the line, experience and precision matter most. With Mackisen, you don’t just get representation—you get protection.
Call Mackisen CPA Auditors Montreal today for your 2025 Director’s Penalty Defense Consultation. The first meeting is free, and your protection starts immediately.
