CRA Director Liability Audit — Montreal CPA Firm Near You: Personal Asset Protection Against Payroll & GST/QST Debts

A CRA Director Liability Audit determines whether a corporation’s directors should be held personally liable for unremitted payroll deductions, GST/HST, or QST. These are considered trust funds, meaning the money never belonged to the corporation — it belonged to the government.
Mackisen CPA Montreal defends directors by reconstructing remittance histories, proving due diligence, documenting governance, and preventing CRA from transferring corporate tax debts onto personal assets.

Director liability is one of the most serious enforcement mechanisms in Canadian tax law. Even when a business closes, CRA can pursue directors for years afterward unless a full due-diligence defense is established.

Legal Foundation

Income Tax Act s.227.1 — holds directors personally liable for unremitted payroll deductions.
Excise Tax Act s.323 — personal liability for unremitted GST/HST.
Québec Tax Administration Act ss.40–44 — extends liability for QPP, QPIP, and provincial tax deductions.
Jurisprudence: Soper v. Canada (1997 FCA) — directors avoid liability if they show “reasonable diligence” in monitoring and ensuring remittances.

Learning insight: CRA does not need to prove intent — only that remittances weren’t made. You must prove diligence, not perfection.

Why CRA Initiates Director Liability Audits

CRA triggers these audits when:
• a corporation owes payroll, GST/HST, or QST remittances
• the company is bankrupt, dissolved, or non-operational
• CRA collection agents fail to recover funds from the corporation
• directors resigned after debts accrued
• governance records appear weak or absent
• T4/T4A/RL-1 filings contradict remittance history
• payroll remittances were habitually late or missing

Learning insight: Director liability begins when corporate compliance fails — but it ends when your CPA proves you acted responsibly.

CRA’s Director Liability Audit Process

1. CRA issues a Pre-Assessment Proposal or “letter of intent to assess a director.”

2. CRA requests board minutes, internal emails, financial records, and payment proofs.

3. CRA reconstructs the remittance timeline.

4. CRA determines whether the director was active during periods of non-remission.

5. CRA issues a Director Liability Assessment (DLA) unless successfully disputed.

6. Your CPA submits a due-diligence defense or objection.

Learning insight: The burden shifts to you — not CRA. A structured defense is essential.

Mackisen CPA’s Director Liability Defense Strategy

• build a complete remittance timeline matching bank records and PD7A slips
• demonstrate consistent director oversight (emails, meeting minutes, approvals)
• prove attempts to correct or resolve remittance issues
• confirm resignation dates to enforce the 2-year limitation rule
• document reliance on competent professionals (payroll services, accountants)
• negotiate payment plans or settlement reductions where appropriate
• prepare formal objections when CRA overreaches

Learning insight: CRA cancels liability when your CPA submits clear, organized, and credible due-diligence proof.

Common CRA Findings Against Directors

• remittances were missed during periods when directors were active
• payroll or GST/HST funds were used for expenses instead of remittance
• directors failed to monitor accountants or bookkeepers
• personal-use payments disguised as business expenses
• resignation was not legally documented
• no system existed to track remittance schedules
• poor governance or no meeting minutes

Learning insight: Weak governance — not wrongdoing — is the biggest cause of director liability reassessments. Governance is defendable when documented.

Real-World Results

• A Montreal retail director avoided $210,000 in payroll liability after Mackisen CPA proved that remittances were delayed due to bank errors, not negligence.
• A construction director overturned a $430,000 DLA by showing detailed oversight logs, emails, and internal reports documenting supervision.
• A dissolved corporation’s director avoided personal seizure when we demonstrated resignation more than two years before remittance failures.

Learning insight: CRA respects directors who can prove control, oversight, and diligence — even under financial stress.

SEO Optimization and Educational Value

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Secondary keywords: QST director liability Quebec, CRA collections defense, remittance audit Canada, director personal asset protection, CPA due diligence defense

Learning insight: In both SEO and compliance, credibility wins — and credibility comes from clear documentation.

Why Mackisen CPA Montreal

Mackisen CPA Montreal brings over 35 years of combined expertise in tax-law application, audit defense, collections management, and corporate governance. We understand exactly what CRA looks for in director liability cases — and how to build a defense that withstands audit and appeal scrutiny.
Our bilingual CPA team protects directors’ personal assets, reputations, and financial futures.

Learning insight: A director’s liability isn’t automatic — it’s preventable when diligence is documented.

Call to Action

If CRA has issued a Director Liability Proposal or collections letter, the next steps are crucial. Responding incorrectly increases personal exposure.
Contact Mackisen CPA Montreal immediately for a complete due-diligence defense strategy.
Phone: 514-276-0808 | Email: info@mackisen.com | Website: mackisen.com

Learning conclusion: A CRA Director Liability Audit tests your diligence, decisions, and documentation. Mackisen CPA Montreal ensures all three are proven — protecting your personal assets and your professional reputation