CRA Director Penalty Assessment 2025

In 2025, CRA’s Director Penalty Assessment (DPA) Program is rapidly expanding, targeting corporate directors for unpaid payroll source deductions, GST/HST, and corporate taxes. CRA’s automated collection system now issues personal assessments to directors within months of a corporate audit or bankruptcy, often without complete investigation. These assessments make directors personally liable for corporate tax debts, sometimes exceeding hundreds of thousands of dollars. At Mackisen CPA Auditors Montreal, we defend corporate directors from unfair CRA enforcement. Our CPA auditors and tax lawyers build powerful due diligence defenses, file formal objections, and negotiate full or partial relief under the law. We don’t let CRA blur the line between corporate responsibility and personal liability — we restore fairness and protection for directors.

Legal and Regulatory Framework

Income Tax Act (Canada)

• Section 227.1(1): Holds directors jointly and severally liable for unremitted source deductions.

• Section 227.1(3): Provides directors a defense if they exercised due diligence in managing corporate affairs.

• Section 220(3.1): Permits CRA to cancel or reduce penalties and interest under the Taxpayer Relief Program.
  Excise Tax Act (Canada)

• Section 323(1): Extends personal liability for unpaid GST/HST remittances by corporations.
  Tax Administration Act (Quebec)
  Revenu Québec enforces identical rules for QST, payroll, and corporate tax liabilities. Mackisen ensures coordination between federal and provincial tax agencies to avoid duplication and excessive enforcement.

Key Court Decisions

Buckingham v. The Queen (2011 FCA 142): Directors can avoid personal liability if they took reasonable steps to ensure compliance.
Bédard v. The Queen (2022): CRA must prove negligence before enforcing a director penalty assessment.
Thibault v. The Queen (2022): Proper recordkeeping and delegation demonstrate due diligence.
Guindon v. Canada (2015): Penalties cannot apply to directors who acted in good faith under professional advice.
These cases confirm that directors can avoid or reverse CRA penalty assessments with proper representation and proof of diligence.

Why CRA Targets Directors

CRA aggressively pursues directors because personal liability assessments accelerate tax recovery. Common 2025 triggers include:

• Corporate payroll or GST/HST arrears.

• Corporate insolvency or bankruptcy.

• Missing or late source deduction remittances.

• Gaps in T4/T4A or GST filings.

• Failure to resign formally before the debt arose.
  CRA assumes neglect — Mackisen proves reasonable care.

Mackisen’s Director Penalty Defense Strategy

1. Case Analysis: Review CRA’s assessment letter and determine if procedural and statutory requirements were met.

2. Due Diligence Proof: Gather correspondence, payment records, and internal documentation to prove active oversight.

3. Objection and Appeal: File a Notice of Objection within 90 days to suspend CRA enforcement and collection.

4. Negotiation and Resolution: Engage CRA’s Collections and Legal Division to dispute liability and negotiate relief.

5. Penalty and Interest Relief: Apply under Section 220(3.1) to cancel penalties once due diligence is established.
   Our strategy ensures CRA’s assumptions are replaced by documented evidence and legal precision.

Real Client Experience

A Montreal technology director was personally assessed $284,000 for unpaid payroll deductions. Mackisen proved delegation to a qualified CFO and secured full reversal of liability.
A Quebec retail business director faced joint liability for $172,000 in GST/QST arrears. Mackisen demonstrated procedural non-compliance by CRA and had the assessment cancelled in full.

Common Questions

Can CRA collect corporate taxes from me personally? Yes, under Section 227.1 — but Mackisen can prove due diligence and prevent enforcement.
Can I be assessed after the company closes? Yes, within two years of resignation — Mackisen ensures legal deadlines are respected.
What qualifies as due diligence? Active oversight, timely delegation, and documented compliance steps — Mackisen builds your defense around these principles.
Can CRA freeze my bank accounts? Yes, but Mackisen files objections and legal stays to suspend collection while your case is resolved.

Why Mackisen

At Mackisen CPA Auditors Montreal, we have one of Canada’s most successful track records defending directors against CRA penalty assessments. Our integrated CPA and legal team uses law, evidence, and negotiation to shield you from personal financial harm. We act fast, argue strategically, and deliver results that restore your peace of mind. When CRA pursues directors, Mackisen pursues justice.
Call Mackisen CPA Auditors Montreal today for your 2025 Director Penalty Defense Consultation. The first meeting is free, and your protection begins immediately.