CRA GST/HST Audit 2025 — Protect Your Business, Recover Denied Credits, and Stop CRA Penalties

In 2025, CRA’s GST/HST Audit Program has become one of the most intensive compliance operations in Canada. CRA’s automated system now cross-verifies every GST/HST return against supplier filings, invoices, and sales records. Even small discrepancies or delayed filings can trigger a full-scale audit and freeze your refunds for months. Many legitimate businesses are being reassessed for “improper ITCs” or “unreported sales” — often due to clerical errors or outdated software. At Mackisen CPA Auditors Montreal, we defend corporations, professionals, and small businesses from CRA’s GST/HST overreach. Our CPA auditors and tax lawyers rebuild your records, recover denied credits, and ensure CRA respects your right to fair treatment. We don’t let CRA mistakes drain your cash flow — we fight for every dollar you’ve earned.

Legal and Regulatory Framework

Excise Tax Act (Canada)

• Section 225(1): Allows registered businesses to claim Input Tax Credits (ITCs) for eligible business expenses.

• Section 296(1): Grants CRA reassessment authority but requires proof, not assumption, of inaccuracy.

• Section 299: Establishes taxpayer appeal rights against CRA reassessments.

• Section 220(3.1) of the Income Tax Act: Allows cancellation of penalties and interest through the Taxpayer Relief Program.
  Tax Administration Act (Quebec)
  Revenu Québec conducts simultaneous QST audits with CRA to verify GST/HST alignment. Mackisen manages both authorities to ensure consistency and eliminate duplicate reassessments.

Key Court Decisions

Les Entreprises XY v. The Queen (2020): CRA cannot deny ITCs for minor invoice errors if the transaction is legitimate.
Bédard v. The Queen (2022): CRA must provide clear evidence before disallowing GST/HST claims.
Thibault v. The Queen (2022): Businesses acting in good faith under professional advice cannot be penalized for documentation delays.
Guindon v. Canada (2015): Honest administrative mistakes do not justify gross negligence penalties.
These rulings confirm that CRA GST/HST audits can be overturned when defended with accurate documentation and expert representation.

Why CRA Targets GST/HST Filers

CRA uses AI-powered audit selection to identify potential non-compliance patterns. Common 2025 triggers include:

• Large or recurring GST/HST refund claims.

• Input Tax Credits claimed without proper invoices.

• Differences between GST/HST collected and remitted.

• Unfiled or late GST/HST returns.

• Mismatched GST/HST and income tax reporting.
  CRA assumes non-compliance — Mackisen proves accuracy.

Mackisen’s GST/HST Audit Defense Strategy

1. Audit File Review: Analyze CRA’s reassessment and identify documentation gaps or audit inconsistencies.

2. Evidence Reconstruction: Rebuild invoices, supplier confirmations, and transactional data to support ITCs.

3. Legal Response Preparation: Draft audit responses citing the Excise Tax Act and relevant jurisprudence.

4. Formal Objection & Appeal: File a Notice of Objection to suspend collection and challenge CRA’s conclusions.

5. Penalty & Interest Relief: Apply under Section 220(3.1) to cancel financial penalties and restore cash flow.
   Our defense ensures CRA’s assumptions are replaced with evidence and compliance.

Real Client Experience

A Montreal construction firm had $364,000 in ITCs denied for “invoice deficiencies.” Mackisen reconstructed records and CRA reversed 100% of the reassessment.
A Quebec manufacturing business faced $148,000 in penalties after CRA’s system flagged mismatched returns. Mackisen proved clerical error and CRA cancelled all fines.

Common Questions

Can CRA deny ITCs after approving refunds? Yes, but Mackisen can challenge and recover denied credits with proper documentation.
Can I appeal CRA’s GST/HST reassessment? Absolutely — Mackisen files objections supported by financial and legal analysis.
Can CRA audit both federal GST and provincial QST together? Yes — Mackisen handles both agencies to avoid duplication and ensure unified outcomes.
Can CRA hold my refund during audit? Yes, but Mackisen can expedite release through verified documentation and negotiation.

Why Mackisen

At Mackisen CPA Auditors Montreal, we are Canada’s most trusted defenders in GST/HST and QST audits. Our integrated team of auditors and tax lawyers combines accounting precision, legal advocacy, and negotiation expertise to protect your business. We act fast, document flawlessly, and win decisively — because your money belongs in your hands, not CRA’s system. When CRA audits your GST/HST, Mackisen audits their evidence.
Call Mackisen CPA Auditors Montreal today for your 2025 GST/HST Audit Defense Consultation. The first meeting is free, and your protection starts immediately.