CRA Offshore Asset / T1135 Audit — Montreal CPA Firm Near You: Foreign Reporting Defense

A CRA Offshore Asset or T1135 Audit is one of the most complex and high-penalty reviews Canadian taxpayers can face. It verifies whether individuals, corporations, or trusts properly reported their foreign assets — including bank accounts, shares, real estate, and investments — exceeding $100,000 CAD in total cost.
Mackisen CPA Montreal provides expert defense and global reporting support to help clients comply with the T1135 rules, respond to CRA information requests, and resolve offshore non-compliance issues through legal disclosure strategies.

Legal Foundation

Law: Income Tax Act s.233.3 — requires residents of Canada to file Form T1135 if they hold “specified foreign property” over $100,000 in cost; s.162(7) and s.162(10.1) — penalties for late or inaccurate filing; s.231.6 — information request authority.
Jurisprudence: Black v. Canada (2014 FCA) — confirmed that CRA can levy $2,500 per year for each missed or inaccurate T1135, even if no tax was owing.

Learning insight: CRA’s focus isn’t on tax owed — it’s on transparency. Mackisen CPA ensures your foreign reporting is complete, accurate, and defensible.

Why CRA Conducts Offshore and T1135 Audits

CRA’s International Compliance Division uses global data-sharing programs (CRS, FATCA, OECD) to detect undeclared offshore holdings. CRA automatically receives account data from foreign banks in 100+ jurisdictions.

Common audit triggers include:

• Foreign income not reported on T1/T2 returns.

• Bank or brokerage accounts disclosed under FATCA or CRS.

• Large foreign transfers detected by FINTRAC or CRA analytics.

• Real estate purchases abroad exceeding declared income levels.

• Repeated late or missing T1135 filings.

Learning insight: CRA doesn’t discover offshore accounts by accident — it’s notified by your bank overseas. Mackisen CPA ensures your compliance before CRA’s data arrives.

CRA’s Offshore Audit Process

1. Information Request: CRA demands Form T1135, statements, and proof of foreign investments.

2. Data Matching: CRA compares your disclosures with international bank and brokerage data.

3. Residency Review: CRA determines whether you were a factual or deemed resident under s.250 ITA.

4. Penalty Proposal: CRA calculates late-filing penalties, potentially backdated up to 10 years.

5. Resolution: Mackisen CPA files corrected forms, prepares voluntary disclosure if applicable, and negotiates penalty relief.

Learning insight: In global audits, the first question is always “where,” not “how much.” We answer both — with evidence.

Mackisen CPA’s Offshore Audit Defense System

1. Asset Tracing: Reconstruct your foreign asset history with detailed reconciliation from banks, brokers, and property records.

2. Residency Analysis: Establish accurate tax-residency status to determine filing obligations.

3. Form T1135 Reconstruction: File or amend missing forms using CRA-approved valuation and currency-conversion methods.

4. Voluntary Disclosure Program (VDP): Evaluate eligibility for penalty and interest relief when CRA hasn’t yet initiated contact.

5. Penalty Mitigation: Negotiate reduced penalties under s.220(3.1) Taxpayer Relief Provisions.

Learning insight: CRA punishes omission, not ownership. Mackisen CPA ensures your ownership story is documented, accurate, and penalty-proof.

Common CRA Audit Findings in Offshore Cases

• Late or missing T1135 filings.

• Misclassified assets (foreign mutual funds, pensions, or partnerships).

• Incorrect valuation or cost-base conversions.

• Unreported foreign dividends or rental income.

• Incomplete ownership disclosure for joint accounts or corporations.

Mackisen CPA’s forensic team reconstructs historical data — even across multiple countries and currencies — ensuring full compliance with CRA’s audit requirements.

Learning insight: Offshore audits don’t require bad intent — just bad paperwork. Mackisen CPA rebuilds that paperwork before CRA redefines it for you.

Penalties and Exposure

CRA penalties for T1135 non-compliance can be severe:

• $25/day late (up to $2,500/year) under s.162(7).

• Gross-negligence penalties (up to $12,000) under s.162(10)(c).

• Extended reassessment period (10 years) for offshore assets.

• Potential criminal prosecution under s.239 for deliberate evasion.

Learning insight: CRA enforces transparency through penalties — Mackisen CPA enforces compliance through precision.

SEO Optimization and Learning Value

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Learning insight: Global compliance starts with local expertise. Mackisen CPA ensures your records align with both international treaties and CRA standards.

Real Client Success

• A Montréal investor avoided $27,500 in penalties after Mackisen CPA submitted late T1135s with proper valuations and proof of no tax impact.

• A dual-resident client cleared a 6-year offshore audit by proving non-residency status through travel, visa, and income data.

• A professional with U.S. rental property avoided reassessment when Mackisen CPA reconstructed missing statements and applied foreign tax credits.

Learning insight: CRA’s data comes from abroad — but your defense comes from home. Mackisen CPA builds that defense before the data arrives.

Why Mackisen CPA Montreal

With over 35 years of international tax experience, Mackisen CPA Montreal specializes in offshore audits, voluntary disclosures, and cross-border compliance. Our bilingual CPAs collaborate with tax lawyers, banks, and global agencies to protect your finances and reputation.
We ensure your international assets are reported accurately and defended confidently.

Learning insight: CRA measures integrity by disclosure. Mackisen CPA ensures your disclosure meets every international and Canadian standard.

Call to Action

If CRA has contacted you about offshore assets, or you’ve missed filing T1135 forms, act now. Early disclosure saves penalties and protects your record.
Contact Mackisen CPA Montreal today for confidential offshore audit representation and compliance restoration.
Phone: 514-276-0808 | Email: info@mackisen.com | Website: mackisen.com

Learning conclusion: CRA Offshore Audits test transparency, not wealth. Mackisen CPA Montreal ensures your foreign assets are disclosed correctly, your penalties minimized, and your global reputation protected.