CRA Corporate Tax Audit 2025 — Defend Your Business, Reverse Reassessments, and Eliminate CRA Penalties

In 2025, CRA’s Corporate Tax Audit Division has become one of the most aggressive enforcement arms in Canada. Using artificial intelligence, CRA’s audit system now cross-verifies every T2 return, GST/HST filing, payroll remittance, and banking record. Even honest corporations are being flagged for “unreasonable expenses,” “associated company underreporting,” or “incorrect intercompany transfers.” Many small and mid-sized businesses are blindsided by audits that escalate into six-figure reassessments and frozen accounts. At Mackisen CPA Auditors Montreal, we defend corporations from CRA’s overreach. Our CPA auditors and tax lawyers build strong, evidence-backed defenses that protect your financial records, restore compliance, and stop collection before it starts. We don’t let CRA’s assumptions define your business — we fight with facts, law, and strategy.

Legal and Regulatory Framework

Income Tax Act (Canada)

• Section 18(1)(a): Allows deduction of legitimate business expenses.

• Section 67: Requires expenses to be reasonable and verifiable.

• Section 125: Governs eligibility for the Small Business Deduction (SBD).

• Section 163(2): Imposes gross negligence penalties — Mackisen removes or reduces them through representation.

• Section 220(3.1): Enables CRA to cancel or reduce penalties and interest under the Taxpayer Relief Program.
  Excise Tax Act (Canada)

• Requires consistency between GST/HST returns and income tax filings. Mackisen ensures cross-compliance across all systems.
  Tax Administration Act (Quebec)
  Revenu Québec conducts parallel audits for QST, payroll, and corporate tax. Mackisen handles both jurisdictions to ensure consistency and complete resolution.

Key Court Decisions

Bédard v. The Queen (2022): CRA cannot reassess corporate deductions without factual support.
Thibault v. The Queen (2022): Corporations relying on professional accountants are not negligent.
Guindon v. Canada (2015): Honest filing errors do not justify gross negligence penalties.
Venne v. The Queen (1984): CRA must base reassessments on verifiable evidence, not estimation.
These rulings confirm that CRA corporate audits can be successfully overturned through documentation and legal precision.

Why CRA Targets Corporations

CRA’s 2025 audit program prioritizes corporations with high transaction volumes or fluctuating income. Common triggers include:

• Large or recurring management fees.

• Intercompany transactions between related entities.

• Frequent losses or inconsistent profits.

• Inaccurate or missing shareholder loan records.

• Late T2 filings or missing supporting documentation.
  CRA assumes non-compliance — Mackisen proves accuracy.

Mackisen’s Corporate Tax Audit Defense Strategy

1. Audit File Analysis: Examine CRA’s audit letter and determine the real scope of review.

2. Documentation Defense: Rebuild receipts, ledgers, and intercompany records to prove every deduction.

3. Intercompany Verification: Ensure management fees, loans, and transfers meet arm’s-length requirements.

4. Formal Objection Filing: Submit a Notice of Objection to stop CRA collection and dispute reassessment.

5. Penalty & Interest Relief: File under Section 220(3.1) to remove all penalties and restore corporate standing.
   Our defense neutralizes CRA’s assumptions with solid, verified compliance evidence.

Real Client Experience

A Montreal logistics firm was reassessed $312,000 for “non-deductible expenses.” Mackisen provided records and CRA cancelled the full reassessment.
A Quebec manufacturing company faced $198,000 in penalties for “unjustified management fees.” Mackisen proved commercial purpose and CRA dropped all charges.

Common Questions

Can CRA audit multiple years at once? Yes, but Mackisen enforces the legal limitation period to stop excessive reach.
Can CRA audit holding and operating companies together? Yes — Mackisen coordinates all entities to ensure unified reporting and defense.
Can CRA freeze corporate accounts? Only after reassessment — Mackisen prevents this through timely objection.
Can CRA reverse Small Business Deductions? Only if criteria are unmet — Mackisen ensures full qualification and defense.

Why Mackisen

At Mackisen CPA Auditors Montreal, we are Canada’s most trusted corporate tax defenders. Our integrated team of CPAs and tax lawyers combines audit precision, negotiation expertise, and deep understanding of CRA systems to protect corporations from unfair penalties. We act quickly, defend aggressively, and deliver results — because your business deserves expertise, not exposure. When CRA audits your corporation, Mackisen audits their judgment.
Call Mackisen CPA Auditors Montreal today for your 2025 Corporate Tax Audit Defense Consultation. The first meeting is free, and your protection starts immediately.