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

A CRA Director Liability Audit investigates whether corporate directors are personally responsible for unremitted payroll taxes, GST/HST, or QST. The Canada Revenue Agency (CRA) and Revenue Québec can pursue directors under the Income Tax Act and Excise Tax Act when the company fails to remit trust funds. Mackisen CPA Montreal provides full audit defense, legal coordination, and compliance strategies to protect directors from personal financial exposure.

Legal Foundation

Law: Income Tax Act s.227.1; Excise Tax Act s.323; Tax Administration Act (Québec) s.24.
Jurisprudence: Soper v. Canada (1997 FCA) — directors can avoid personal liability by showing due diligence in ensuring remittances were made.

Why You Need a CPA for a Director Liability Audit

When CRA or Revenue Québec suspects that source deductions or GST/HST have not been remitted, they often issue Director Liability Notices (DLNs). These notices make directors jointly and severally liable for corporate debts. Once served, you have 30 days to file a formal defense. A CPA ensures that all required filings, remittances, and payment proofs are presented with precision and legal backing.

Mackisen CPA Montreal works alongside legal counsel to demonstrate that the director exercised due diligence, implemented financial controls, and took reasonable steps to comply with tax obligations.

Learning insight: CRA audits directors not because of intent, but because of oversight. A strong CPA defense shows that your systems—not your ethics—failed temporarily.

What Mackisen CPA’s Director Liability Defense Includes

• Review of payroll and GST/QST remittance history.

• Reconstruction of PD7A and FPZ-500-V payment schedules.

• Preparation of a detailed due-diligence report outlining director oversight measures.

• Coordination with tax lawyers to file formal objection under ITA s.165.

• Negotiation of payment plans or relief under Taxpayer Relief provisions.

Learning insight: Directors are fiduciaries of compliance. A CPA shows regulators that responsibility was exercised—even if the outcome faltered.

Common Triggers for Director Liability Audits

• Repeated late or missing remittances.

• Corporate insolvency or bankruptcy filings.

• Payroll tax arrears or unfiled GST/HST returns.

• Resignation without formal documentation.

• Employee complaints or whistleblower tips.

Mackisen CPA identifies and corrects these issues before they result in a Director Liability Notice, protecting both personal and corporate finances.

How Mackisen CPA Manages Director Liability Audits

1. Reviews all corporate filings and remittance records to assess exposure.

2. Builds a chronology of director actions demonstrating due diligence.

3. Files written objections and coordinates with legal representatives.

4. Negotiates settlements or relief for penalties and interest.

5. Implements permanent internal controls to prevent future liability.

Learning insight: CRA holds directors to a standard of care, not perfection. A CPA demonstrates that your management met that standard through timely action and oversight.

Benefits of Professional Representation

• Prevents personal asset seizure for corporate tax debts.

• Protects credit rating and reputation of directors.

• Ensures timely response to CRA’s 30-day objection deadline.

• Provides structured compliance evidence for court or appeal.

• Reduces or eliminates penalties through due-diligence defense.

Learning insight: A strong due-diligence file is a director’s shield. Without documentation, even honesty can look like negligence.

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Learning insight: The law protects those who act in good faith—but only if they can prove it. Mackisen CPA ensures your actions are documented before they are questioned.

Real Client Success

• A manufacturing CEO avoided personal liability for $250,000 in payroll taxes after Mackisen CPA demonstrated board-approved compliance plans.

• A restaurant owner successfully rebutted a Director Liability Notice when our due-diligence file proved consistent oversight and timely payroll efforts.

• A startup director obtained full interest relief through our CRA Taxpayer Relief application.

Why Mackisen CPA Montreal

Mackisen CPA Montreal combines legal insight, financial control, and audit defense experience to protect directors from unfair liability. Our bilingual team collaborates with legal counsel and tax officers to ensure every aspect of due diligence is verifiable and defensible.

Learning insight: Being a director comes with risk, but not ruin. With Mackisen CPA, your actions are documented, your defenses are ready, and your personal assets are protected.

Learning conclusion: Director liability doesn’t arise from bad intentions—it arises from gaps in documentation. Mackisen CPA Montreal closes those gaps, turning compliance into your best defense.