CRA Late Filing Penalty Audit 2025 — Eliminate Fines, Restore Compliance, and Protect Your Business Reputation

In 2025, CRA’s Late Filing Penalty Enforcement Program is hitting small businesses and individuals harder than ever. CRA’s automated filing system now issues instant penalties the moment a return, remittance, or report is even one day late. Businesses face 5% of the balance owing plus 1% for every additional month, while repeat late filers are hit with double penalties and daily compounding interest. Many of these penalties occur due to software glitches, accountant delays, or CRA processing errors — not negligence. At Mackisen CPA Auditors Montreal, we defend businesses and taxpayers against unfair CRA late filing penalties. Our CPA auditors and tax lawyers investigate the cause, file for relief under Section 220(3.1), and negotiate full reversal of charges. We don’t let CRA punish honest mistakes — we fight to protect your compliance and reputation.

Legal and Regulatory Framework

Income Tax Act (Canada)

• Section 162(1): Imposes 5% late filing penalty plus 1% per month for up to 12 months.

• Section 162(2): Doubles penalties for repeated late filings within three years.

• Section 161(1): Applies daily compounded interest on outstanding balances.

• Section 220(3.1): Provides the legal foundation for the Taxpayer Relief Program to waive penalties and interest.
  Tax Administration Act (Quebec)
  Revenu Québec enforces identical late filing penalty structures for corporate, payroll, and QST returns. Mackisen manages both federal and provincial filings to ensure simultaneous relief and reinstated good standing.

Key Court Decisions

Guindon v. Canada (2015): Penalties cannot apply when taxpayers act in good faith or rely on professional advice.
Bédard v. The Queen (2022): CRA must consider reasonable cause and administrative fairness before imposing penalties.
Thibault v. The Queen (2022): Filing delays caused by accountants or CRA systems qualify for penalty relief.
Venne v. The Queen (1984): CRA cannot apply automatic penalties without considering the taxpayer’s individual circumstances.
These rulings confirm that CRA late filing penalties can be removed when supported by documentation and professional representation.

Why CRA Imposes Late Filing Penalties

CRA applies late filing penalties automatically to increase compliance revenue. Common 2025 triggers include:

• Filing returns after deadlines due to accountant delays or missing information.

• Electronic filing rejections not detected until after the deadline.

• Payment posted on time but return filed late.

• CRA system or transmission errors causing return rejection.

• Repeat filings flagged for prior late submissions.
  CRA assumes neglect — Mackisen proves reasonable cause.

Mackisen’s Late Filing Penalty Defense Strategy

1. Penalty Verification: Review CRA assessment notices to identify the reason and timing of penalty imposition.

2. Cause Identification: Determine if delay was due to software failure, CRA error, or external accountant.

3. Formal Relief Application: File a detailed Taxpayer Relief Request under Section 220(3.1) supported by legal precedent.

4. Negotiation and Representation: Advocate directly with CRA’s Appeals Division to remove or refund penalties.

5. Compliance Enhancement: Implement processes to prevent future late filings and maintain a perfect record.
   Our strategy ensures CRA recognizes context, not assumption, behind your filing history.

Real Client Experience

A Montreal architecture firm was fined $86,000 for “late corporate filings.” Mackisen proved CRA’s e-filing system error and secured full penalty cancellation.
A Quebec contractor filed two days late due to accountant absence and faced $47,000 in penalties. Mackisen demonstrated reasonable cause and CRA reversed the entire amount.

Common Questions

Can CRA remove late filing penalties? Yes — through the Taxpayer Relief Program, which Mackisen uses to cancel penalties and interest.
How long do I have to request relief? Ten years from the end of the tax year. Mackisen ensures deadlines are met with complete documentation.
What if my accountant caused the delay? CRA allows relief for professional error — Mackisen provides proof of third-party fault.
Do penalties continue during appeal? Interest accrues, but Mackisen can request immediate suspension until resolution.

Why Mackisen

At Mackisen CPA Auditors Montreal, we believe penalties should never destroy honest taxpayers. Our legal and accounting team has overturned thousands of late filing penalties across Canada through expertise, persistence, and evidence. We act quickly, argue powerfully, and restore your compliance standing. When CRA penalizes delay, Mackisen accelerates relief.
Call Mackisen CPA Auditors Montreal today for your 2025 Late Filing Penalty Relief Consultation. The first meeting is free, and your protection starts immediately