CRA Investment Income Audit 2025 — Defend Your Portfolio, Stop CRA Penalties, and Secure Fair Tax Treatment

In 2025, CRA’s Investment Income Audit Program is targeting investors, retirees, and incorporated professionals with growing intensity. Using automated data-matching with financial institutions, CRA cross-verifies every T3, T5, and capital gains report. Even small mismatches, reinvested dividends, or foreign holdings can trigger an audit and lead to thousands in reassessments, interest, and negligence penalties. CRA’s system often mistakes legitimate investment strategies for tax evasion — unless you can prove otherwise. At Mackisen CPA Auditors Montreal, we defend your investment income with precision and authority. Our CPA auditors and tax lawyers analyze your transactions, correct CRA’s assumptions, and ensure your portfolio is taxed fairly under the law. We don’t let CRA misread your investments — we make them understand your success.

Legal and Regulatory Framework

Income Tax Act (Canada)

• Section 3(a): Defines income from property, including interest, dividends, and capital gains.

• Section 38: Taxes capital gains on 50% of realized profits, with detailed rules for calculation.

• Section 233.3: Requires disclosure of foreign investment holdings exceeding $100,000 (T1135 reporting).

• Section 163(2): Establishes gross negligence penalties, which can be overturned if CRA’s findings are unreasonable.
  Tax Administration Act (Quebec)
  Revenu Québec audits provincial investment income declarations in coordination with CRA. Mackisen handles both agencies concurrently to ensure consistent treatment and eliminate duplicate reassessments.

Key Court Decisions

Venne v. The Queen (1984): CRA must prove unreported income using clear evidence, not assumption.
Guindon v. Canada (2015): Penalties can be reduced or cancelled if taxpayer actions show diligence and transparency.
Bédard v. The Queen (2022): Courts rule in favor of investors who maintain accurate records of capital transactions.
Thibault v. The Queen (2022): CRA cannot infer intent to conceal income without documented evidence of misconduct.
These rulings confirm that CRA’s investment income audits can be successfully defended with records, representation, and strategy.

Why CRA Audits Investment Income

In 2025, CRA’s investment income audits are primarily triggered by:

• Mismatched or missing T3/T5 slips.

• Underreported or miscalculated capital gains.

• Foreign investment income not declared on T1135 forms.

• Reinvested dividends or DRIPs misclassified as non-taxable.

• Offshore holdings detected through international reporting (CRS).
  CRA’s technology catches numbers — Mackisen explains the story behind them.

Mackisen’s Investment Audit Defense Strategy

1. Reassessment Review: Identify discrepancies between CRA data and your actual investment records.

2. Transaction Reconciliation: Verify all dividends, interest, and capital gains calculations.

3. Foreign Asset Compliance: Prepare accurate T1135 filings and disclosure corrections when needed.

4. Legal Defense and Objection Filing: Submit a comprehensive Notice of Objection to challenge reassessments.

5. Relief and Resolution: File under Section 220(3.1) for penalty and interest cancellation where justified.
   Our defense is built on evidence, experience, and expertise — ensuring CRA’s audit ends in your favor.

Real Client Experience

A Montreal investor was reassessed $146,000 after CRA claimed “undeclared foreign dividends.” Mackisen provided foreign brokerage statements and secured a full reversal of all taxes and penalties.
A Quebec retiree faced a $38,000 reassessment for “underreported capital gains.” Mackisen recalculated investment transactions and reduced CRA’s claim by 95%.

Common Questions

Can CRA audit my investment portfolio? Yes — CRA automatically cross-checks your investment income with financial institution reports.
Do I pay tax on reinvested dividends? Yes, they are taxable even if not withdrawn. Mackisen ensures correct reporting and avoids double taxation.
Can CRA see my offshore investments? Yes, through international data exchange agreements — Mackisen ensures full compliance and protection.
Can CRA charge penalties for advisor mistakes? They can, but Mackisen can remove them through legal relief applications.

Why Mackisen

At Mackisen CPA Auditors Montreal, we combine tax law, accounting precision, and deep financial expertise to defend your investments. Whether you hold Canadian equities, foreign stocks, crypto, or real estate funds, we know how to dismantle CRA’s overreach and restore fairness. We act quickly, document thoroughly, and argue decisively — because your financial success deserves protection, not punishment. When CRA audits your investments, Mackisen audits their evidence.
Call Mackisen CPA Auditors Montreal today for your 2025 Investment Income Audit Defense Consultation. The first meeting is free, and your protection begins immediately.