CRA Audit Penalty Relief 2025 — Remove Fines, Reduce Interest, and Restore Your Financial Stability

Facing CRA audit penalties can feel overwhelming, but most taxpayers don’t realize these fines are often negotiable or completely removable. In 2025, CRA’s automated systems issue penalties automatically for late filings, reporting errors, or missing documentation — often without considering your real circumstances. These penalties can add up to 50% of the tax owed, plus daily compounded interest. But with the right defense and representation, you can reverse, reduce, or eliminate them entirely. At Mackisen CPA Auditors Montreal, we specialize in defending businesses and individuals against CRA audit penalties. Our CPA auditors and tax lawyers analyze CRA’s findings, build compelling Taxpayer Relief Applications, and negotiate directly with CRA officers to cancel unjust penalties and stop interest from growing. We don’t accept CRA penalties — we remove them.

Legal and Regulatory Framework

Income Tax Act (Canada)

• Section 162(1): Imposes late filing penalties of 5% plus 1% per month for 12 months.

• Section 163(2): Applies a gross negligence penalty of 50% of the understated tax.

• Section 220(3.1): Grants CRA discretion to cancel or waive penalties and interest under the Taxpayer Relief Program.

• Section 161(1): Accrues daily interest on unpaid balances until resolved.
  Tax Administration Act (Quebec)
  Revenu Québec enforces equivalent penalties and interest under provincial law but offers similar relief options for financial hardship or administrative error. Mackisen handles both agencies in parallel to ensure a complete, coordinated resolution.

Key Court Decisions

Guindon v. Canada (2015): CRA penalties are valid but can be cancelled if taxpayers prove reasonable care or hardship.
Campbell v. The Queen (2017): Taxpayer illness or accountant error qualifies for penalty relief under fairness provisions.
Browne v. The Queen (2022): Courts emphasize equitable treatment when penalties arise from genuine mistakes.
Thibault v. The Queen (2022): Proper documentation and professional applications increase success in penalty cancellation.
These rulings show that CRA’s penalties are not final — they can be overturned with evidence and expertise.

Why CRA Issues Audit Penalties

In 2025, CRA issues audit penalties instantly through automated compliance algorithms. The most common triggers include:

• Late filing or missed remittance deadlines.

• Disallowed deductions or missing receipts.

• Failure to report income or discrepancies between T-slips and returns.

• CRA system errors or administrative delays.

• Honest bookkeeping or accountant mistakes.
  CRA’s systems don’t account for human circumstances — but Mackisen ensures that the law does.

Mackisen’s CRA Audit Penalty Relief Strategy

1. Penalty Review: Analyze CRA’s audit letter and confirm the legal and factual basis of each penalty.

2. Evidence Collection: Gather documentation to prove illness, hardship, or professional reliance.

3. Taxpayer Relief Application: Draft and file a strong Section 220(3.1) submission requesting penalty and interest cancellation.

4. Appeal & Negotiation: Engage CRA’s Relief Division to negotiate fair resolutions or file formal objections if needed.

5. Prevent Future Penalties: Establish compliance controls and recordkeeping systems to avoid repeat exposure.
   Our strategy combines accuracy, empathy, and legal authority — transforming CRA penalties into opportunities for relief.

Real Client Experience

A Montreal business owner received $64,000 in CRA audit penalties for “incomplete filings.” Mackisen filed a detailed hardship relief request and achieved a 100% penalty cancellation within two months.
A Quebec consultant faced $28,000 in gross negligence penalties after their accountant filed incorrectly. Mackisen appealed the assessment, provided correspondence proof, and reduced the penalty to zero.

Common Questions

Can CRA cancel penalties? Yes — under Section 220(3.1), CRA can cancel penalties and interest for up to 10 years retroactively.
Can I apply for relief twice? Yes, if new evidence or financial conditions exist.
Do I qualify for penalty relief? Likely, if you can show illness, hardship, or third-party error.
Will CRA stop charging interest while reviewing my case? Interest continues until approval, but Mackisen can request temporary suspension in severe hardship cases.

Why Mackisen

At Mackisen CPA Auditors Montreal, we’ve helped thousands of Canadians escape unfair CRA penalties. Our team’s deep knowledge of audit law and CRA’s internal relief criteria allows us to craft winning applications that deliver real results. We act fast, build solid evidence, and negotiate firmly — because financial mistakes should never define your future. We don’t fear CRA — we fix their mistakes.
Call Mackisen CPA Auditors Montreal today for your 2025 CRA Audit Penalty Relief Consultation. The first meeting is free, and your recovery begins immediately.
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