CRA GST/HST Drywall Patching, Minor Hole Repair & Small-Area Wall Restoration Audit — Montreal CPA Firm Near You: Defending Taxable Labour, Material Costs, Subcontractors & ITCs

A CRA GST/HST Drywall Patch & Small-Area Repair Audit targets:

• drywall patching technicians
• minor hole repair contractors
• dent & crack repair specialists
• water-damage small-area patch teams
• corner-bead replacement
• drywall compound & sanding touch-ups
• mobile patch-and-paint operators
• subcontract drywall helpers

Although these are small, quick jobs, CRA treats every drywall repair as 100% taxable, and this industry is on the audit radar because:

• most repairs are paid in cash/e-transfer
• invoices are often missing or incomplete
• labour + material is often bundled incorrectly
• subcontract helpers are not GST-registered
• supply purchases (compound, tape) exceed reported revenue
• multi-visit patch jobs not invoiced properly

Mackisen CPA Montreal specializes in defending drywall patch contractors through correct GST/HST treatment, subcontractor verification, and complete ITC documentation.

Legal Foundation

Excise Tax Act

• s.165 — ALL drywall repair, patching, mudding, sanding & restoration work is fully taxable

• s.221 — GST/HST must be charged and remitted

• s.169 — ITCs available only with complete receipts and proof of payment

• s.141.01 — mixed-use allocation for tools & vehicles

• Schedule IX — GST/HST based on the location of the repaired property

• s.123(1) — defines “repair,” “installation,” “real property service”

CRA + Case Law

• Drywall patching = taxable

• Compound & material charges = taxable

• Travel/time fees = taxable

• Royal Bank v. Canada — strict documentary requirements

• CGI v. Canada — place-of-supply rules must be followed

• Northwest Company Inc. — supplier invoices must meet all statutory elements

Learning insight: Even tiny repairs (2–3 inch hole) are 100% taxable, with no exemptions.

Why CRA Audits Drywall Patch & Small-Repair Contractors

Revenue Risks

• GST/HST not charged on patch & repair labour
• cash/e-transfer jobs underreported
• material charges (compound, tape, sandpaper) not taxed
• “handyman drywall repair” miscoded to avoid GST
• no invoices for multi-visit sanding sessions
• after-hours/emergency hole repairs not billed
• landlord/tenant quick-repair jobs not recorded
• QC/ON/Atlantic jobs misrated

Subcontractor Risks

• helpers without GST registration
• invalid or missing subcontractor invoices
• cash payments to helpers
• T4A exposure for repeated labour
• GST numbers not active at time of invoice

ITC Risks

• missing receipts for:
– mud, compound, tape, mesh
– sanding discs, dust masks, PPE
– knives, hawks, trowels, pans
– small tools & drywall saws
– vehicle mileage/fuel
• imported sanding tools missing GST self-assessment (s.218)
• personal-use tools claimed as business
• home-storage/shop ITC overclaim

Operational Risks

• no job logs for patch work
• WhatsApp/SMS “quick fixes” not turned into invoices
• supplies bought in bulk with little revenue reported
• no before/after photos
• inconsistent job timelines
• multi-unit building repairs not itemized

High-risk operators:

• small drywall repair technicians

• mobile handyman-drywall patchers

• water-damage drywall spot-repair teams

• subcontract-heavy contractors

Learning insight: CRA looks for mismatches between supply purchases and reported repair revenue.

CRA Drywall Patch Audit Process

1. CRA requests:
   – invoices (patch, mudding, sanding, travel, materials)
   – subcontractor invoices + GST numbers
   – job logs (address, size of hole, hours worked)
   – supplier receipts (Home Depot, RONA, gyprock suppliers)
   – bank/e-transfer statements
   – mileage logs
   – ITC spreadsheets
   – import records for tools
   – photos or project documentation

2. CRA tests:
   • GST/HST applied on every repair
   • subcontractor compliance
   • ITC documentation completeness
   • logs → invoices → deposits → GST returns
   • imported-tool self-assessment
   • place-of-supply application (QC/ON/Atlantic)
   • material usage vs job count

3. CRA issues Proposed Audit Adjustment.

4. Mackisen CPA prepares a complete documentary + legal defense.

Learning insight: CRA rebuilds drywall activity using compound usage, sanding pad purchases & e-transfer deposits.

Mackisen CPA’s Drywall Patch Audit Defense Strategy

• create a Drywall Repair Tax Matrix (repair, patch, sanding, materials, travel)
• rebuild GST/HST-compliant invoices
• validate subcontractor GST/HST numbers
• reconstruct ITC binder (materials, tools, PPE, vehicle)
• reconcile logs → invoices → deposits → GST filings
• defend material waste (cutting, overlap, second-coat usage)
• correct GST/HST for interprovincial patch jobs
• rebuild imported-tool self-assessment entries
• prepare a CPA-certified CRA audit binder
• negotiate penalty & interest relief

Learning insight: These audits are won through precise repair logs, clean invoices & ITC rigor.

Common CRA Findings in Drywall Patch Audits

• GST/HST not charged on small repairs
• subcontractor invoices missing GST
• ITCs denied for missing receipts
• imported tools not self-assessed
• bank deposits > reported revenue
• small patch jobs not invoiced
• e-transfer payments not recorded
• material usage inconsistent with declared jobs

Learning insight: CRA’s biggest reassessments come from cash underreporting + missing ITCs + weak subcontractor documentation.

Real-World Results

• A patch-and-mudding technician avoided a $152,000 reassessment after Mackisen CPA rebuilt logs & subcontractor records.
• A condo-unit drywall repair contractor reversed a $81,000 ITC denial with complete tool & material receipts.
• A rental-turnover drywall patcher eliminated penalties by applying proper GST/HST on all repairs.
• A handyman-drywall hybrid contractor cleared CRA findings through deposit → invoice → job-log reconciliation.

Learning insight: Once job logs and material usage align, CRA assumptions collapse.

SEO Optimization & Educational Value

Primary keywords: GST/HST drywall repair audit, CRA patch and mudding audit, taxable home repair services Canada, Mackisen CPA Montreal
Secondary keywords: drywall ITC denial, subcontract drywall audit, sanding tool GST, small repair GST/HST

Learning insight: High SEO demand exists for drywall-repair GST rules due to widespread contractor activity.

Why Mackisen CPA Montreal

With 35+ years defending drywall patchers, repair technicians & handyman-drywall contractors, Mackisen CPA Montreal is Québec’s top authority in GST/HST repair-sector audits.
We understand mudding workflows, sanding processes, subcontractor risks & CRA audit methodology deeply.

Learning insight: Drywall audits require detail-heavy logs, supply tracking & GST discipline — all strengths of Mackisen CPA.

Call to Action

If CRA is auditing your drywall patch, minor hole repair, mudding/sanding, or small-area restoration business, contact Mackisen CPA Montreal immediately:

📞 514-276-0808
📧 info@mackisen.com
🌐 mackisen.com

Learning Conclusion:

A CRA GST/HST Drywall Patch Audit tests taxable labour, material usage, subcontractor compliance, ITC documentation & revenue accuracy.
Mackisen CPA Montreal ensures complete audit protection.