CRA Payroll Source Deduction Reassessment 2025 — Protect Your Business, Stop CRA Penalties, and Secure Director Relief

In 2025, CRA’s Payroll Source Deduction Reassessment Program has become one of the most aggressive enforcement tools in Canada. Businesses that make even minor errors in payroll remittances or timing are being hit with steep penalties and interest. CRA’s automated matching systems now cross-check every T4, T4A, and remittance report — and any inconsistency triggers a reassessment. For directors, this can mean personal liability under Section 227.1 of the Income Tax Act. Many companies face these penalties not for negligence, but due to administrative or software errors. At Mackisen CPA Auditors Montreal, we defend corporations and directors from CRA’s payroll reassessments. Our CPA auditors and tax lawyers review every transaction, correct CRA’s miscalculations, and file strategic objections that reverse penalties and restore compliance. We don’t let CRA automation destroy your credibility — we defend your business with precision and power.

Legal and Regulatory Framework

Income Tax Act (Canada)

• Section 153(1): Requires employers to withhold and remit income tax, CPP, and EI.

• Section 227.1(1): Holds directors personally liable for unremitted source deductions unless due diligence is proven.

• Section 162(1): Imposes penalties for late or insufficient remittances.

• Section 220(3.1): Allows CRA to cancel or reduce penalties and interest under the Taxpayer Relief Program.
  Employment Insurance Act & Canada Pension Plan (CPP) Act
  CRA uses these statutes to reassess underpaid or miscalculated employer and employee contributions.
  Tax Administration Act (Quebec)
  Revenu Québec applies similar enforcement for QPP, QPIP, and CNESST contributions. Mackisen manages both agencies to ensure full defense and consistency.

Key Court Decisions

Buckingham v. The Queen (2011 FCA 142): Directors can avoid personal liability by proving due diligence and reasonable care.
Thibault v. The Queen (2022): CRA cannot assume negligence without evidence of intent or inaction.
Guindon v. Canada (2015): Honest mistakes and professional reliance do not justify gross negligence penalties.
Bédard v. The Queen (2022): Payroll reassessments can be overturned through proper documentation and professional representation.
These rulings confirm that CRA’s payroll reassessments can be reversed with evidence, diligence, and expert defense.

Why CRA Targets Payroll Source Deductions

CRA views payroll as “trust money” owed to the government. Common 2025 triggers include:

• Late or missing payroll remittances.

• Discrepancies between T4 filings and payments.

• Incorrect CPP, EI, or income tax calculations.

• Contractor misclassification as employees.

• Missed QPP or QPIP contributions in Quebec.
  CRA assumes fault — Mackisen proves compliance.

Mackisen’s Payroll Reassessment Defense Strategy

1. Audit & File Review: Examine CRA’s reassessment notice and identify calculation or reporting errors.

2. Reconciliation: Rebuild accurate payroll records and remittance proof to demonstrate compliance.

3. Director Liability Defense: Prepare due diligence documentation to protect directors personally.

4. Formal Objection & Appeal: File within 90 days to halt CRA collection and reassessment enforcement.

5. Penalty & Interest Relief: Apply under Section 220(3.1) to remove financial penalties and accumulated interest.
   Our structured defense safeguards both your corporation and its leadership.

Real Client Experience

A Montreal logistics firm was reassessed $148,000 in “unremitted payroll deductions.” Mackisen reconstructed records, proved all remittances were on time, and CRA cancelled the reassessment entirely.
A Quebec professional corporation faced director liability for payroll arrears after a software glitch. Mackisen demonstrated due diligence and secured full director relief.

Common Questions

Can CRA personally pursue directors for payroll debts? Yes — but Mackisen can prevent this by proving due diligence and documentation.
Can CRA reassess closed years? Only if they allege negligence; Mackisen ensures reassessments stay within legal time limits.
Can CRA add penalties on top of payroll interest? Yes, but Mackisen can apply for full cancellation through relief provisions.
What if I inherited payroll issues from a prior accountant? Mackisen can prove you acted reasonably and secure penalty relief.

Why Mackisen

At Mackisen CPA Auditors Montreal, we combine deep payroll expertise with strategic legal defense to protect your business and directors from CRA’s aggressive enforcement. We act quickly, document thoroughly, and argue decisively to ensure your rights are respected. When CRA reassesses your payroll, Mackisen reassesses their math.
Call Mackisen CPA Auditors Montreal today for your 2025 Payroll Source Deduction Reassessment Consultation. The first meeting is free, and your protection starts immediately.