CRA Audit Demand Letter 2025 — Respond Fast, Avoid Penalties, and Protect Your Business

When the Canada Revenue Agency (CRA) sends you an Audit Demand Letter, time is everything. In 2025, CRA’s automated audit system issues thousands of demand letters each week — requiring taxpayers to submit receipts, statements, and records within short deadlines. Missing these deadlines can trigger penalties, reassessments, and even full-blown audits. But most demand letters can be resolved quickly and favorably with the right professional guidance. At Mackisen CPA Auditors Montreal, we act immediately to respond to CRA audit demands, prepare compliant documentation, and prevent escalation. Our CPA auditors and tax lawyers coordinate with CRA officers, ensure full legal compliance, and protect your rights throughout the process. We don’t react to CRA’s timeline — we set it.

Legal and Regulatory Framework

Income Tax Act (Canada)

• Section 230(1): Requires taxpayers to maintain records for six years and present them upon CRA request.

• Section 231.1: Authorizes CRA to examine records and demand supporting documentation.

• Section 231.2: Allows CRA to issue formal written demands for information from third parties (banks, clients).

• Section 162(1): Applies penalties for failure to respond on time.
  Tax Administration Act (Quebec)
  Revenu Québec may issue similar demand letters for provincial filings, GST/QST compliance, or payroll records.
  Mackisen prepares responses for both agencies, ensuring consistency and accuracy in every submission.

Key Court Decisions

Venne v. The Queen (1984): Failure to maintain records allows CRA to assess based on estimates.
Jordan v. The Queen (2009): CRA must provide clear notice and reasonable time to respond.
Guindon v. Canada (2015): Penalties can be reduced when errors are unintentional or caused by administrative confusion.
Thibault v. The Queen (2022): Professional representation improves CRA audit outcomes significantly.
These cases confirm that a timely, structured response is your best legal protection against CRA assumptions.

Why CRA Issues Demand Letters

CRA audit demand letters are sent to verify information before reassessment. Common 2025 triggers include:

• Large or unusual deductions (travel, meals, home office).

• Discrepancies between T-slips and declared income.

• GST/HST or QST filing inconsistencies.

• Missing receipts for claimed credits or expenses.

• Repeated filing errors or late submissions.
  Demand letters are not accusations — but ignoring them turns them into penalties.

Mackisen’s CRA Audit Demand Response Strategy

1. Immediate File Review: Analyze CRA’s request and identify what documents are truly required.

2. Evidence Preparation: Organize receipts, bank statements, contracts, and ledgers to meet CRA’s specifications.

3. Response Submission: File a complete, professional response package within the legal deadline.

4. Legal Defense: If CRA misinterprets your information, Mackisen’s team steps in to clarify or appeal.

5. Preventive Action: Establish compliance systems to prevent future audit letters or documentation gaps.
   We transform CRA pressure into a structured, successful resolution — without penalties or reassessments.

Real Client Experience

A Montreal contractor received a CRA audit demand for $68,000 in “unverified expenses.” Mackisen prepared all documentation within 10 days — CRA accepted every claim, no reassessment issued.
A Quebec consultant was asked to produce four years of receipts within two weeks. Mackisen negotiated a deadline extension and submitted a detailed file, resulting in zero penalties.

Common Questions

How long do I have to respond to a CRA audit demand? Usually 30 days — Mackisen ensures compliance before deadlines.
What if I can’t find all my documents? We reconstruct missing records from banking, supplier, or client data.
Can I ignore the letter if my taxes are correct? No — failing to reply automatically triggers reassessment.
Can I negotiate more time? Yes, Mackisen can request extensions directly from CRA officers.

Why Mackisen

At Mackisen CPA Auditors Montreal, we protect individuals and businesses from CRA overreach. Our experts know exactly how to respond — quickly, completely, and convincingly. With precision accounting, legal insight, and clear communication, we turn CRA audits into opportunities for resolution and protection. We respond fast, act smart, and defend strong — because your business deserves the right defense.
Call Mackisen CPA Auditors Montreal today for your 2025 CRA Audit Demand Consultation. The first meeting is free, and your protection starts immediately.