Insight
Nov 24, 2025
Mackisen
CRA Offshore Asset / T1135 Audit — Montreal CPA Firm Near You: Foreign Reporting & Global Compliance Defense
A CRA Offshore Asset / T1135 Audit is launched when the Canada Revenue Agency believes a taxpayer may have undisclosed foreign assets, unreported offshore income, or missing T1135 filings for specified foreign property exceeding $100,000 CAD.
This is one of the most high-risk audit types because CRA uses global data-sharing systems — FATCA (U.S.) and the OECD Common Reporting Standard (CRS) — to match foreign bank, investment, and real-estate holdings with Canadian tax returns.
Mackisen CPA Montreal provides full audit defense, reconstruction of foreign records, and correction of past filings to prevent penalties that can reach $2,500 per year, or even more under gross-negligence provisions.
A T1135 audit is not about wealth — it’s about transparency. Our job is to prove your compliance and rebuild your foreign-reporting structure so CRA has no grounds for penalties.
Legal Foundation
Income Tax Act s.233.3 — requires Canadian residents to file Form T1135 if foreign assets exceed $100,000 in cost.
Income Tax Act s.162(7) — $25/day late filing penalty (up to $2,500 per year).
Income Tax Act s.162(10.1) — severe penalties for gross negligence regarding foreign assets.
Income Tax Act s.231.6 — CRA’s power to demand offshore information.
Jurisprudence: Black v. Canada (2014 FCA) — CRA can impose full penalties even when no tax is owing.
Learning insight: You don't need to owe tax to owe penalties. CRA punishes non-reporting — not non-payment.
Why CRA Initiates T1135 & Offshore Audits
CRA receives automatic data from foreign governments and financial institutions. Common triggers for audits include:
Foreign financial accounts reported abroad but not on Canadian returns
Large inbound wire transfers from overseas accounts
Foreign rental income not reported in Canada
Real estate owned abroad with no T1135 filing
Crypto exchanges located outside Canada
Whistleblower or informant tips involving offshore holdings
Residency changes or unclear departure dates
Learning insight: CRA doesn’t “discover” offshore assets. It receives them automatically. Your CPA must ensure your disclosure matches CRA’s data.
CRA Offshore Audit Process
CRA issues a T1135 information request or audit letter.
CRA demands foreign bank statements, investment summaries, transaction histories, and property documents (often up to 10 years).
CRA matches FATCA/CRS data with your reported amounts.
CRA evaluates residency status to confirm filing requirements.
CRA issues penalties, adjustments, or refers case to Criminal Investigations for severe discrepancies.
Learning insight: The first question CRA asks is not “How much?” but “Why didn’t you report it?” Mackisen CPA prepares the answer.
Mackisen CPA’s Offshore Audit Defense Strategy
Reconstruct missing foreign financial history (bank accounts, investments, holdings).
Determine correct residency status for each year — crucial for compliance.
Re-prepare or correct T1135 forms using accurate cost bases and currency exchange rates.
Apply foreign-tax credits to prevent double taxation.
Prepare voluntary disclosures when eligible to reduce penalties.
Handle all communication with CRA to avoid misinterpretation.
Learning insight: Offshore compliance is not solved with forms — it is solved with reconstruction, explanation, and evidence.
Common Errors CRA Finds in Offshore Audits
T1135 filed late or not filed at all
Foreign assets misclassified (funds, partnerships, pensions)
Incorrect currency conversion rates used
Rental income abroad not declared
Missing joint-ownership reporting
Bank accounts categorized incorrectly
Failure to disclose crypto or online-platform assets held offshore
Learning insight: Offshore audits rarely fail on tax issues — they fail on documentation issues. Fixing documentation protects you from penalties.
Real-World Results
A Montreal investor avoided $25,000 in penalties after Mackisen CPA reconstructed six years of missing T1135 data and demonstrated non-wilful error.
A Canadian resident with European property cleared a reassessment when our CPA team proved the asset was jointly owned and below the reporting threshold.
A consultant with U.S. trading accounts avoided gross-negligence penalties after we corrected filings and applied unused foreign-tax credits.
Learning insight: CRA accepts imperfection — but never accepts missing disclosure. Mackisen CPA makes disclosure complete, consistent, and compliant.
SEO Optimization and Educational Value
Primary Keywords: CRA T1135 Audit, Offshore Asset Audit Canada, Mackisen CPA Montreal, CPA Firm Near You, Foreign Asset Reporting, CRA Global Tax Compliance
Secondary Keywords: FATCA CRS audit, offshore disclosure CPA, T1135 late filing penalty, CRA foreign bank audit, Mackisen CPA foreign income defense
Learning insight: The same transparency that protects you from CRA increases your online credibility. Education is compliance — and marketing.
Why Mackisen CPA Montreal
Mackisen CPA Montreal brings 35+ years of CRA audit defense experience, specializing in cross-border taxation, offshore disclosures, and residency determinations. We work with international institutions, foreign accountants, and tax lawyers to build airtight reporting files that satisfy CRA audits and protect clients from heavy penalties.
Learning insight: In offshore audits, CRA tests honesty. Mackisen CPA documents it.
Call to Action
If you’ve received a T1135 request, offshore audit letter, or notice regarding foreign accounts, do not delay — early intervention reduces penalties dramatically.
Contact Mackisen CPA Montreal for full offshore audit defense and global-reporting correction.
Phone: 514-276-0808 | Email: info@mackisen.com | Website: mackisen.com
Learning conclusion: A CRA Offshore / T1135 Audit tests disclosure, not wealth. Mackisen CPA Montreal ensures your foreign assets are reported accurately, defended intelligently, and compliant globally — protecting your finances and your future.
