Insights
Oct 24, 2025
Mackisen
CRA Director Penalty Assessment 2025 — Defend Yourself, Stop Personal Liability, and Protect Your Assets
If the Canada Revenue Agency (CRA) can’t collect corporate taxes, it will come after you personally. Under the Director’s Liability Program, the CRA has the authority to issue a Director Penalty Assessment (DPA) — holding you personally responsible for unremitted payroll deductions, GST/HST, and source deductions. In 2025, CRA’s enforcement algorithms automatically identify corporate directors and issue penalty notices even years after resignation or dissolution. Once assessed, CRA can freeze your personal accounts, seize assets, and garnish wages. At Mackisen CPA Auditors Montreal, we defend directors and officers from unfair liability claims. Our CPA auditors and tax lawyers review CRA’s legal basis, prove your due diligence, and challenge every element of the assessment — protecting your personal and professional future. We don’t let CRA turn corporate debt into personal ruin — we turn defense into relief.
Legal and Regulatory Framework
Income Tax Act (Canada)
Section 227.1: Holds directors personally liable for unremitted payroll taxes and source deductions.
Section 323 (Excise Tax Act): Extends liability to GST/HST obligations.
Section 220(3.1): Allows taxpayers to request relief or reduction of penalties under the Taxpayer Relief Program.
Section 161(1): Accrues daily compounded interest until liability is resolved or overturned.
Tax Administration Act (Quebec)
Revenu Québec can issue equivalent director liability assessments for unpaid QST, CNESST, and other payroll obligations. Mackisen handles both CRA and Quebec claims simultaneously, ensuring unified representation and full defense.
Key Court Decisions
Buckingham v. The Queen (2011 FCA 142): Directors are liable only if they failed to demonstrate reasonable care.
Wheeldon v. The Queen (1999): CRA must prove that the director had active control or influence during the liability period.
R. v. Carroll (2008): Directors who resign before the debt accrues cannot be held responsible.
Thibault v. The Queen (2021): Due diligence and documented oversight are valid defenses against CRA personal liability.
These rulings confirm that CRA must prove negligence — and that proper defense can fully eliminate personal exposure.
Why CRA Issues Director Penalty Assessments
CRA uses DPAs to recover corporate tax debt directly from directors. Common 2025 triggers include:
Unremitted payroll deductions (income tax, CPP, EI).
Unpaid GST/HST or QST remittances.
Business closure without clearance certificates.
Long-term non-compliance or unfiled returns.
Lack of communication during collection actions.
Many directors don’t realize that liability continues for up to two years after resignation — unless formally discharged.
Mackisen’s Director Liability Defense Strategy
Assessment Review: Examine CRA’s DPA for procedural errors or insufficient notice.
Due Diligence Documentation: Compile evidence of your efforts to ensure remittances were made.
Timeline Verification: Prove resignation, lack of control, or non-involvement during the liability period.
Objection and Appeal Filing: Submit a formal defense through CRA’s Appeals Division and, if necessary, the Tax Court of Canada.
Negotiation and Relief: Pursue penalty and interest reduction under the Taxpayer Relief Program based on fairness and financial hardship.
Mackisen builds defenses that are factual, legal, and persuasive — designed to protect both your assets and your reputation.
Real Client Experience
A Montreal executive received a CRA Director Penalty Assessment for $134,000 in payroll arrears. Mackisen proved he had resigned before the debt period — CRA cancelled the assessment entirely.
A Quebec retail owner was personally targeted for $82,000 in unpaid GST/QST. Mackisen filed a due diligence defense with supporting records and secured a 90% reduction in liability.
Common Questions
Can CRA make me pay my company’s tax debt? Yes — if you were a director during the debt period. Mackisen ensures liability is limited or nullified through due diligence proof.
How long can CRA pursue me after resignation? Two years from the date your resignation was officially filed.
Can I fight a Director Penalty Assessment? Absolutely. Mackisen files objections, appeals, and relief applications with a high success rate.
Can I negotiate a settlement? Yes. Mackisen often negotiates partial payments or full cancellations under hardship provisions.
Why Mackisen
At Mackisen CPA Auditors Montreal, we defend corporate directors with precision and power. Our CPA and legal teams combine deep accounting expertise with strategic tax law experience to dismantle CRA’s claims and secure fair outcomes. We act fast, argue hard, and protect what matters most — your livelihood and legacy.
Call Mackisen CPA Auditors Montreal today for your 2025 Director Penalty Defense Consultation. The first meeting is free, and your protection begins immediately.
