CRA Director Liability Audit — Montreal CPA Firm Near You: Protect Your Personal Assets

A CRA Director Liability Audit is one of the most serious enforcement actions a business leader can face. When a corporation fails to remit payroll deductions, CPP, EI, GST/HST, or QST, the Canada Revenue Agency (CRA) and Revenu Québec can hold its directors personally responsible for the outstanding trust-fund amounts.
Mackisen CPA Montreal provides experienced representation, forensic reconstruction, and legal coordination to defend directors against personal liability, proving due diligence and compliance under Canadian law.

Legal Foundation

Law: Income Tax Act s.227.1 (director’s liability for unremitted source deductions); Excise Tax Act s.323 (GST/HST liability); Tax Administration Act (Québec) arts.40–44 (QST and payroll trust obligations).
Jurisprudence: Soper v. Canada (1997 FCA) — directors can avoid liability by proving they took all reasonable steps to ensure remittances were made.

Learning insight: CRA doesn’t have to prove fraud — only inaction. Your CPA’s job is to prove diligence, not perfection.

Why CRA Pursues Directors

CRA initiates director liability audits when corporations fail to remit statutory deductions or file required reports. These funds are considered trust money, belonging to the government.
Common triggers include:

• Missed or late payroll, GST/HST, or QST remittances.

• Corporate bankruptcy or insolvency.

• Unfiled payroll or tax returns.

• Board or director turnover without resignation notices.

• CRA collection efforts exhausted at the corporate level.

Learning insight: Signing authority equals responsibility — Mackisen CPA ensures your actions show control, not neglect.

CRA’s Director Liability Audit Process

1. Audit Launch: CRA reviews corporate filings, bank records, and remittance history.

2. Notice of Intended Assessment: CRA notifies directors of potential personal liability.

3. Due-Diligence Inquiry: CRA requests proof that directors took active steps to ensure compliance.

4. Assessment: CRA may transfer corporate debts to directors personally under s.227.1.

5. Collection: CRA can garnish wages, freeze bank accounts, or register liens on property.

Learning insight: CRA timelines matter — if two years have passed since resignation, liability may be barred. Mackisen CPA ensures the clock works in your favor.

Mackisen CPA’s Director Liability Defense Framework

1. Timeline Reconstruction: Analyze all remittance activity, board minutes, and corporate correspondence.

2. Due-Diligence Documentation: Prepare evidence showing directors monitored and acted on financial obligations.

3. Resignation Proof: Confirm resignation dates to trigger statutory limitation under s.227.1(4).

4. Negotiation and Legal Liaison: Coordinate with tax counsel to challenge assessments or negotiate settlements.

5. Taxpayer Relief Applications: File for interest and penalty reduction under extraordinary circumstances.

Learning insight: CRA collects assumptions — Mackisen CPA collects proof. Documentation is your best legal defense.

Common CRA Findings in Director Liability Audits

• Directors unaware of remittance arrears.

• Lack of documented oversight or communication with accountants.

• Informal resignations with no legal record.

• Payroll funds used for supplier or wage payments.

• Missing trust reconciliations or T4/RL-1 filings.

Mackisen CPA Montreal identifies these weaknesses and builds strong due-diligence defenses that demonstrate consistent effort and intent to comply.

Learning insight: CRA punishes silence — not struggle. A documented effort to fix problems is still diligence.

Real Client Success

• A Montréal manufacturing director avoided $220,000 in personal liability after Mackisen CPA demonstrated that remittance delays were due to external banking issues beyond control.

• A construction executive had a $380,000 DLN withdrawn when our team proved timely board discussions and accountant follow-up.

• A retail business director reduced penalties by 90% when Mackisen CPA prepared a full due-diligence log covering remittances and correspondence.

Learning insight: CRA cancels assessments when directors prove responsibility — Mackisen CPA builds that proof from day one.

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Learning insight: Strong digital authority mirrors strong audit defense — both rely on organization and credibility. Mackisen CPA ensures both are built into your case.

Why Mackisen CPA Montreal

With over 35 years of combined CRA audit and tax-law experience, Mackisen CPA Montreal is Québec’s trusted defense partner for director liability cases. Our bilingual CPAs collaborate with tax lawyers to prepare due-diligence evidence, defend directors, and restore compliance.
We handle the details — from CRA correspondence to timeline reconstruction — so your leadership and assets remain protected.

Learning insight: Leadership carries risk — Mackisen CPA ensures it also carries proof of diligence.

Call to Action

If CRA or Revenu Québec has issued a Director Liability Notice or you suspect personal exposure for unremitted trust funds, act immediately.
Contact Mackisen CPA Montreal for confidential director-liability defense and compliance reconstruction.
Phone: 514-276-0808 | Email: info@mackisen.com | Website: mackisen.com

Learning conclusion: CRA Director Liability Audits test diligence, not destiny. Mackisen CPA Montreal ensures your record of action, documentation, and oversight keeps your leadership respected — and your personal assets protected.