CRA GAAR / Aggressive Planning Audit — Montreal CPA Firm Near You: Substance Over Form

A CRA GAAR (General Anti-Avoidance Rule) or Aggressive Planning Audit targets transactions or reorganizations that, while legally structured, may lack commercial substance or abuse the intent of the Income Tax Act. CRA’s Aggressive Tax Planning Division and Revenue Québec’s Direction des planifications fiscales abusives coordinate to detect arrangements designed solely for tax advantages. Mackisen CPA Montreal provides expert defense by demonstrating the genuine business purpose and economic substance of your transactions, protecting you from reassessments under GAAR.

Legal Foundation

Law: Income Tax Act s.245; Tax Administration Act (Québec) s.1079.10.
Jurisprudence: Canada Trustco Mortgage Co. v. Canada (2005 SCC) — established the modern test for GAAR: a transaction must be abusive, lack commercial purpose, and misuse or abuse tax provisions to be invalidated.

Why You Need a CPA for a GAAR / Aggressive Planning Audit

GAAR audits are highly technical and often involve millions in potential reassessments. CRA applies GAAR when it believes the taxpayer has technically complied with the law but has circumvented its spirit. A CPA must demonstrate that each step in your planning had a valid commercial reason, independent of tax motives. Mackisen CPA Montreal integrates tax-law expertise, documentation, and corporate intent analysis to ensure CRA sees your actions as business-driven, not tax-driven.

Learning insight: CRA challenges motives, not math. A CPA proves that the motive was management, not manipulation.

What Mackisen CPA’s GAAR Defense Includes

• Review of all transactions, reorganizations, or share exchanges flagged by CRA.

• Preparation of legal and economic justifications for each step in the transaction chain.

• Collaboration with tax lawyers for GAAR-compliant documentation and opinion letters.

• Drafting of commercial-purpose memos demonstrating operational necessity.

• Filing of objection and appeal submissions under s.165 and s.169 where required.

Learning insight: GAAR defense isn’t about showing what you saved—it’s about proving what you built.

Common Triggers for GAAR / Aggressive Planning Audits

• Tax-motivated reorganizations without operational change.

• Dividend stripping, surplus extraction, or circular transactions.

• Complex share freezes or pipeline transactions lacking supporting valuations.

• Artificial capital losses or deductions created by offset arrangements.

• Cross-border structures that exploit mismatched tax treatments.

Mackisen CPA Montreal identifies these risks before CRA does—closing the gap between technical compliance and legal intent.

How Mackisen CPA Manages GAAR Audits

1. Performs a transaction-mapping analysis to isolate each legal and tax event.

2. Reconstructs commercial rationale and board resolutions supporting each step.

3. Obtains valuation reports, financing documents, and third-party confirmations.

4. Aligns all planning with precedents from Canada Trustco, Copthorne, and Deans Knight (SCC 2023).

5. Prepares a comprehensive CPA defense file emphasizing real economic benefit.

Learning insight: The difference between planning and avoidance is purpose. A CPA documents your purpose before CRA questions it.

Benefits of Professional Representation

• Prevents automatic characterization of transactions as abusive.

• Minimizes risk of multi-year reassessments or GAAR penalties.

• Demonstrates transparency and cooperation, improving negotiation outcomes.

• Provides coordinated defense with tax lawyers for appeal readiness.

• Protects corporate reputation and financial stability.

Learning insight: GAAR isn’t a penalty—it’s CRA’s opinion. With the right CPA evidence, opinions can change.

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Learning insight: The GAAR rule tests fairness, not creativity. Mackisen CPA proves that tax efficiency backed by substance is compliance—not avoidance.

Real Client Success

• A Quebec holding company avoided a $1.2M GAAR reassessment after Mackisen CPA demonstrated business reorganization for operational efficiency.

• A Montreal technology group maintained its intercompany financing plan when we proved real commercial risk and independent funding intent.

• A national distributor cleared an aggressive planning audit after Mackisen CPA validated genuine expansion motives under GAAR jurisprudence.

Why Mackisen CPA Montreal

Mackisen CPA Montreal unites financial reporting precision with deep legal reasoning. Our team aligns economic substance, legal documentation, and tax compliance to withstand the strictest CRA scrutiny under GAAR. We defend your planning as responsible, transparent, and strategic.

Learning insight: CRA enforces substance over form; Mackisen CPA ensures your form is supported by substance.

Learning conclusion: The GAAR rule protects fairness in taxation. Mackisen CPA Montreal ensures your planning remains fair, lawful, and bulletproof—proving that strategic tax efficiency is not abuse, but mastery.