CRA Corporate Tax Filing Audit — Montreal CPA Firm Near You: Ensuring Accuracy and Compliance in T2 Returns

A CRA Corporate Tax Filing Audit focuses on reviewing the accuracy and completeness of your corporation's T2 tax return, ensuring that all income, deductions, and tax credits are properly reported and supported by adequate documentation. These audits often arise from discrepancies between the filed return and third-party data, such as T4/T5 slips, or when CRA suspects non-compliance with tax rules.
Mackisen CPA Montreal helps businesses defend against these audits by reviewing corporate tax filings, reconciling income and expenses, identifying potential errors, and preparing a comprehensive CPA-certified audit file.

CRA audits can challenge anything from capital gains to transfer pricing to business expense deductions. Proactively managing your T2 audit ensures that your corporate tax position remains accurate and your business avoids penalties or adjustments.

Legal Foundation

Income Tax Act s.152(1) — the CRA’s authority to assess and reassess corporate tax filings.
Income Tax Act s.20(1) — defines eligible business expenses for tax-deductible purposes.
Income Tax Act s. 248(1) — outlines the rules for income and expense recognition in corporate filings.
Jurisprudence: Canada Trustco Mortgage Co. v. Canada (2005 SCC) — confirms that a corporate tax filing must reflect the economic reality of the business transactions.

Learning insight: CRA’s focus is not just on numbers — it’s on whether the business substance matches the filings. Your CPA proves it.

Why CRA Conducts Corporate Tax Filing Audits

CRA initiates corporate tax audits when it detects anomalies or potential underreporting in T2 returns. Common reasons for a corporate tax audit include:
• discrepancies between filed T2 returns and third-party information (e.g., T4/T5 slips)
• large or unusual deductions for business expenses or CCA (Capital Cost Allowance)
• unreported or misclassified income (capital gains vs. business income)
• inconsistent transfer-pricing arrangements for intercompany transactions
• missed tax credits or incorrect SR&ED claims
• failure to match GST/HST filings with income tax returns
• unusual profit or loss patterns, such as recurring losses or large refunds
• capital gains treatment applied to income-generating property sales

Learning insight: Corporate audits aren’t random — CRA is looking for patterns that suggest mistakes or intentional misreporting.

CRA Corporate Tax Filing Audit Process

1. CRA issues a detailed audit letter requesting all supporting documentation for the filed T2 return.

2. CRA analyzes the income statement, balance sheet, and all deductions, focusing on non-cash items (like depreciation, reserves, and provisions).

3. CRA verifies the correctness of Capital Cost Allowance (CCA) claims and the application of taxable capital gains.

4. CRA compares third-party data (T4/T5 slips, financial statements, and other filings) to corporate tax returns.

5. CRA tests transfer pricing between related entities.

6. CRA issues proposed adjustments and penalties if discrepancies are found.

7. Mackisen CPA prepares a detailed objection or audit response, supplying additional evidence, legal interpretations, and reconciliation data.

Learning insight: The first step in handling a T2 audit is having a clear, complete, and accurate set of records to support every claim.

Mackisen CPA’s Corporate Tax Filing Defense Strategy

• reconcile business income with third-party data (T4/T5 slips, bank statements, invoices)
• analyze and document every expense deduction to ensure eligibility (e.g., CCA, home office, vehicle use)
• validate transfer pricing compliance and align with CRA’s arm’s-length principles
• prepare full tax-credit documentation for SR&ED, R&D, and other industry-specific deductions
• defend capital gains treatment with market-based evidence and financial transactions
• reconstruct the CCA class to ensure eligible assets are depreciated correctly
• submit a CPA-certified response to CRA’s audit proposals, ensuring no documentation gaps

Learning insight: The key to preventing reassessments is preparation — not just responding. Your CPA prepares with precision and foresight.

Common Findings in Corporate Tax Filing Audits

• incorrect classification of business vs. capital income (i.e., capital gains treated as regular income)
• misallocated expenses — personal vs. business expenses improperly claimed
• incorrect CCA claims — assets not properly classified or depreciated
• undocumented deductions for home office, vehicle expenses, or professional fees
• discrepancies between the T2 return and financial statements
• transfer-pricing adjustments where intercompany transactions are not properly documented
• missed tax credits — including SR&ED and investment tax credits
• failure to report international business transactions and associated withholding taxes

Learning insight: The most common issues are classification errors and lack of documentation — both of which can be prevented with organized, transparent filing.

Real-World Results

• A manufacturing company avoided a $500,000 tax adjustment by demonstrating the correct CCA treatment of specialized equipment through proper documentation and supporting invoices.
• A software development firm saved $150,000 in SR&ED reassessment penalties after Mackisen CPA documented additional technical developments and provided detailed project timelines.
• A wholesale distributor eliminated a transfer pricing adjustment after we provided evidence showing that intercompany charges were fair-market value and properly documented in the T2 filings.

Learning insight: The biggest issue in corporate tax audits is documentation — but once fixed, CRA adjustments are often minimal or avoided altogether.

SEO Optimization and Educational Value

Primary keywords: CRA corporate tax audit, corporate tax filing defense, Mackisen CPA Montreal, T2 audit defense, corporate income tax compliance
Secondary keywords: CCA audit, CRA SR&ED claims, transfer pricing defense, tax reassessment, business expense audit

Learning insight: Both SEO and CRA audits value documentation that’s consistent, clear, and complete. We provide both.

Why Mackisen CPA Montreal

With over 35 years of experience in corporate tax filings, audit defense, and CRA negotiations, Mackisen CPA Montreal helps businesses navigate complex T2 audits. Our bilingual CPA team is equipped to handle everything from routine corporate filings to large-scale reassessments, ensuring your tax position remains intact.

Learning insight: Corporate tax audits test your financial systems. We ensure those systems are both compliant and audit-proof.

Call to Action

If CRA has issued a T2 tax audit or proposed adjustments to your corporate filings, don’t delay.
Contact Mackisen CPA Montreal for immediate audit defense, tax filing support, and strategic negotiation.
Phone: 514-276-0808 | Email: info@mackisen.com | Website: mackisen.com

Learning conclusion: A CRA Corporate Tax Filing Audit doesn’t have to lead to costly adjustments or penalties. Mackisen CPA Montreal ensures your T2 filing is strong, consistent, and defensible, protecting your business.