ARQ Losses & Credits Audit — Montreal CPA Firm Near You: Preserve Carryforwards

An ARQ Losses & Credits Audit (Vérification des pertes et crédits) is a detailed review by Revenu Québec to confirm that corporate or individual tax losses, investment credits, and carryforwards were accurately calculated and legitimately claimed. The goal of this audit is to verify that deductions and credits applied in one year were indeed earned and properly documented in prior years. Mackisen CPA Montreal safeguards your financial continuity by ensuring every carryforward, loss, and refundable credit is preserved under the law—before the ARQ reassesses it.

Legal Foundation

Law: Taxation Act (Québec) ss. 724–729 (loss carryforwards and credits continuity rules); Tax Administration Act art. 93 (powers of audit and verification).
Jurisprudence: Rio Tinto Alcan Inc. v. ARQ (2013 CQ) — established that loss carryforwards and credits must be supported by consistent accounting records and documentary evidence demonstrating legitimate business losses.

Why You Need a CPA for a Loss & Credit Audit

ARQ loss and credit audits often extend over several years and can result in large retroactive assessments if documentation is incomplete. Revenu Québec cross-verifies each carryforward against prior filings, CO-17 schedules, and CRA data to ensure the same loss or credit isn’t used twice. Mackisen CPA Montreal meticulously reconstructs prior-year financials, ensuring that every figure aligns with tax-law definitions and accounting standards.

Learning insight: A carryforward isn’t a gift—it’s deferred value. Without a CPA, that value can disappear under audit.

What Mackisen CPA’s Loss & Credit Audit Defense Includes

• Reconciliation of loss carryforwards between CO-17, T2, and financial statements.

• Validation of refundable tax credits (CII, CDAE, R&D) under Québec and federal laws.

• Documentation of business losses, investment credits, and unclaimed refunds.

• CPA-certified continuity schedules covering up to 20 years of history.

• Legal opinion letter outlining justification for loss application.

Learning insight: Every dollar of unused loss is an asset. Every missing proof turns that asset into tax liability.

Common Triggers for ARQ Loss & Credit Audits

• Repeated loss carryforwards without consistent business activity.

• Mismatches between CRA and ARQ carryforward balances.

• Corporate reorganizations or ownership changes without loss-continuity elections.

• Use of prior-year credits without supporting CO-1029.8 forms.

• Refundable R&D, CDAE, or CII credits claimed after statute-expiry dates.

Mackisen CPA Montreal identifies these issues early and reconstructs historical filings to prove compliance with Québec’s Taxation Act and GAAP standards.

How Mackisen CPA Manages Loss & Credit Audits

1. Performs full reconciliation of carryforwards across all years and jurisdictions.

2. Reviews corporate ownership structure to preserve loss continuity under TA s. 726.

3. Verifies calculation of refundable tax credits using supporting expense records.

4. Prepares CPA-certified schedules reconciling losses and credits with filed returns.

5. Represents clients directly before Revenu Québec and CRA joint audit divisions.

Learning insight: The longer a loss stays unverified, the harder it is to defend. Mackisen CPA restores proof where the records are silent.

Benefits of Professional Representation

• Protects carryforwards and credits accumulated over multiple years.

• Prevents disallowance of R&D, CDAE, or CII credits under procedural errors.

• Avoids reassessment penalties for duplicate or overstated loss claims.

• Ensures compliance under both Québec and federal tax legislation.

• Builds permanent continuity files for lenders, investors, and future audits.

Learning insight: Every carryforward is a deferred refund waiting to return. A CPA keeps it alive through audit-proof documentation.

SEO Optimization and Learning Value

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Learning insight: Audits don’t erase your tax history—they test its memory. Mackisen CPA preserves that memory with records, reconciliations, and law.

Real Client Success

• A Montréal tech firm preserved $780,000 in R&D tax credits after Mackisen CPA proved continuity of eligible expenses under TA s. 1029.8.36.16.

• A Québec manufacturer retained 12 years of carryforward losses after our CPA team reconstructed missing CO-17 schedules and CRA assessments.

• A professional-services group recovered $90,000 in denied CII credits through proper reconciliation and CPA-certified documentation.

Why Mackisen CPA Montreal

Mackisen CPA Montreal provides complete loss and credit audit representation for corporations, professionals, and SMEs. Our bilingual team combines deep tax-law knowledge, accounting precision, and legal reasoning to ensure your tax history remains compliant and protected across all years.

Learning insight: A carryforward is your financial legacy. Mackisen CPA ensures that legacy is protected—documented, defended, and preserved.