CRA Corporate Income Tax Audit — Montreal CPA Firm Near You: Large File Defense

A CRA Corporate Income Tax Audit is a comprehensive review of a corporation’s books, financial statements, and tax filings to verify income, deductions, and compliance with the Income Tax Act. These audits are detailed, often multi-year examinations involving intercompany transactions, capital assets, and tax credits.
Mackisen CPA Montreal provides complete audit representation and documentation management, ensuring your corporation’s tax records meet CRA’s standards of accuracy, transparency, and commercial reality.

Legal Foundation

Law: Income Tax Act s.231.1–231.2 (CRA audit and inspection powers), s.152(1) (assessment authority), and s.247 (transfer pricing adjustments).
Jurisprudence: General Motors of Canada v. The Queen (2008 FCA) — confirmed CRA’s right to reassess transactions between related corporations where fair-market value and commercial purpose must be demonstrated.

Learning insight: CRA doesn’t challenge your business — it challenges your paperwork. Mackisen CPA ensures your documentation tells the right story.

Why CRA Targets Corporate Audits

Corporate income tax audits are triggered by patterns that suggest potential misstatements or aggressive tax positions. CRA uses risk algorithms and data matching across tax filings, payroll, and GST/HST accounts.
Common triggers include:

• Repeated operating losses or sudden income fluctuations.

• Intercompany or related-party transactions without proper documentation.

• Large management fees or consulting expenses.

• Significant capital cost allowance (CCA) claims.

• Unfiled or inconsistent T2 schedules (e.g., Schedule 1, 8, or 50).

• R&D (SR&ED) credits without technical proof.

Learning insight: CRA’s audit program assumes size equals complexity — Mackisen CPA proves that complexity can also mean compliance.

How CRA Conducts a Corporate Income Tax Audit

1. Audit Launch: CRA issues a formal letter specifying years under review and required documentation.

2. Information Requests (RFI): CRA asks for ledgers, contracts, and related-party agreements.

3. On-Site Review: Auditors may conduct interviews and system walkthroughs at corporate offices.

4. Variance and Ratio Analysis: CRA compares your financial results with industry averages.

5. Proposal Letter: CRA provides preliminary findings for your response before final reassessment.

Learning insight: CRA doesn’t assess based on assumptions — it assesses based on silence. Mackisen CPA ensures your evidence speaks before CRA does.

Mackisen CPA’s Corporate Audit Defense Framework

1. Financial Reconciliation: Review all schedules, trial balances, and adjusting entries for consistency.

2. Expense Substantiation: Match deductions to supporting invoices, contracts, and purpose explanations.

3. Intercompany Proof: Prepare transfer pricing documentation and confirm fair-market value transactions.

4. Tax Credit Verification: Validate SR&ED, manufacturing, and investment credits with proof of eligibility.

5. Capital Asset Review: Recalculate depreciation and ensure CCA aligns with Regulation 1100.

6. CRA Negotiation: Handle all correspondence, auditor meetings, and file submissions.

Learning insight: CRA audits are 80% process and 20% persuasion — Mackisen CPA masters both.

Common CRA Adjustments in Corporate Audits

• Disallowed management fees or intercompany charges.

• Overstated CCA claims or capital expenditures misclassified as expenses.

• Disallowed shareholder loans or personal-use assets.

• Denied scientific research and experimental development (SR&ED) credits.

• Incorrect allocation of taxable income between jurisdictions.

Mackisen CPA Montreal identifies these vulnerabilities early and builds airtight defenses grounded in law and documentation.

Learning insight: CRA challenges weakness — Mackisen CPA replaces weakness with evidence.

Real Client Success

• A Montréal manufacturer avoided a $900,000 reassessment after Mackisen CPA proved legitimate cost allocations among related companies.

• A consulting group reversed a $320,000 penalty when we demonstrated that management fees were supported by valid contracts and board resolutions.

• A technology firm recovered $250,000 in denied SR&ED credits after our team resubmitted documentation aligned with CRA’s technical eligibility standards.

Learning insight: CRA doesn’t accept explanations — it accepts structured, documented proof. Mackisen CPA provides exactly that.

SEO Optimization and Educational Value

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Secondary Keywords: CRA intercompany audit, CRA management fee review, CRA corporate expense audit, Mackisen CPA tax defense Montreal, SR&ED audit Canada.

Learning insight: Visibility and compliance both come from clarity. Mackisen CPA delivers clarity in writing, filing, and defense.

Why Mackisen CPA Montreal

With over 35 years of experience representing corporations across Québec and Canada, Mackisen CPA Montreal combines technical precision with audit strategy. Our bilingual CPAs, forensic accountants, and tax lawyers build comprehensive audit files that protect your corporation’s position and reputation.
We ensure your filings meet not just CRA’s standards — but also international financial reporting and compliance benchmarks.

Learning insight: CRA tests accuracy; Mackisen CPA proves governance. Together, they create credibility.

Call to Action

If CRA has initiated a corporate income tax audit or issued an RFI, act before the deadline.
Contact Mackisen CPA Montreal for professional audit defense, intercompany reconciliation, and large-file management.
Phone: 514-276-0808 | Email: info@mackisen.com | Website: mackisen.com

Learning conclusion: A CRA Corporate Audit isn’t a crisis — it’s an opportunity to prove precision. Mackisen CPA Montreal ensures your corporation emerges from every audit stronger, cleaner, and ready for growth.