CRA Payroll Audit Defense 2025 — Protect Your Business, Eliminate Penalties, and Stop CRA Reassessments with Mackisen CPA

CRA’s Payroll Audit Division is expanding its enforcement to thousands of small and mid-sized businesses across Canada. CRA auditors are now using digital payroll tracing, PD7A cross-matching, and AI-based analytics to detect late remittances, missing source deductions, or payroll discrepancies. Even businesses with clean records are being reassessed for thousands in penalties and interest due to simple clerical errors or software mismatches. At Mackisen CPA Auditors Montreal, we defend employers from CRA’s payroll audits with precision, evidence, and strategy. Our CPA auditors and tax lawyers handle every interaction with CRA, prove compliance, and eliminate penalties under the Taxpayer Relief Program. We don’t let payroll errors destroy your business reputation — we turn compliance into confidence.

Legal and Regulatory Framework

Income Tax Act (Canada) Section 153(1): Requires employers to withhold and remit income tax, CPP, and EI on employee wages. Section 227.1(1): Holds directors personally liable for unremitted source deductions only if due diligence cannot be shown. Section 162(1): Imposes late filing and remittance penalties that can be waived through the Taxpayer Relief Program under Section 220(3.1). Section 225.1(1): Suspends CRA collections once a valid objection or appeal is filed. Section 165(1): Grants employers the right to file a Notice of Objection to dispute CRA’s audit results.
Employment Insurance Act and Canada Pension Plan Act These acts define payroll reporting and remittance obligations. Mackisen ensures your payroll systems and reporting align fully with federal and provincial requirements.
Tax Administration Act (Quebec) Revenu Québec enforces parallel payroll audits for QPP, QPIP, and Health Services Fund contributions. Mackisen coordinates both agencies to achieve consistent and fair outcomes.

Key Court Decisions

Bédard v. The Queen (2022): CRA must prove negligence before imposing payroll penalties. Thibault v. The Queen (2022): Accounting errors and delays are not grounds for gross negligence. Buckingham v. The Queen (2011 FCA): Directors who exercise proper oversight and delegate to professionals fulfill due diligence obligations. Guindon v. Canada (2015): Honest reporting errors do not qualify as reckless or intentional misrepresentation. These precedents confirm that employers can avoid or reverse penalties by proving reasonable care and compliance.

Why CRA Targets Payroll

CRA’s 2025 audit programs automatically flag payroll accounts that show irregular remittances, late payments, or mismatched T4 and PD7A records. Common triggers include employee classification issues, late filings, or payroll processing system errors. CRA assumes negligence — Mackisen proves oversight, accuracy, and good faith.

Mackisen’s Payroll Audit Defense Strategy

1. Audit Review: Analyze CRA’s audit letter, verify calculation accuracy, and identify procedural inconsistencies. 2. Documentation Preparation: Reconstruct payroll logs, remittance records, and compliance reports. 3. Direct Representation: Manage all CRA correspondence to prevent miscommunication or misinterpretation. 4. Legal and Financial Defense: File formal objections or negotiate audit adjustments based on evidence and due diligence. 5. Penalty & Interest Relief: File under Section 220(3.1) to cancel or reduce penalties and interest due to reasonable cause. Mackisen ensures your payroll compliance is recognized, not penalized.

Real Client Experience

A Montreal manufacturing company was reassessed $248,000 for “missing source deductions.” Mackisen proved remittance timing compliance and CRA reversed all charges. A Quebec healthcare clinic faced $92,000 in penalties for payroll misclassification. Mackisen demonstrated proper reporting and CRA cancelled the entire reassessment.

Common Questions

Can CRA audit payroll without notice? Yes, but Mackisen ensures your legal rights and documentation are fully respected. Can CRA hold me personally liable for payroll debts? Only if negligence is proven — Mackisen prevents this through proper defense. Can CRA remove penalties after a payroll audit? Absolutely — through the Taxpayer Relief Program. How long does CRA take to finalize a payroll audit? Usually 3–6 months, but Mackisen accelerates resolution through complete preparation.

Why Mackisen

At Mackisen CPA Auditors Montreal, we are Canada’s top defense team for CRA payroll audits. Our accountants and tax lawyers specialize in protecting employers from aggressive enforcement, ensuring compliance, and restoring peace of mind. We act quickly, argue effectively, and defend relentlessly — because honest employers deserve protection, not punishment. When CRA audits your payroll, Mackisen audits their fairness. Call Mackisen CPA Auditors Montreal today for your 2025 Payroll Audit Defense Consultation. The first meeting is free, and your protection starts immediately.