CRA Shareholder Loan Audit 2025 — Protect Your Company, Avoid Double Taxation, and Eliminate CRA Penalties

In 2025, CRA’s Shareholder Loan Audit Program is targeting thousands of small and mid-sized businesses across Canada. CRA’s automated audit systems now cross-check corporate T2 returns, shareholder ledgers, and bank transactions to identify loans or withdrawals that haven’t been properly documented or repaid. Many business owners are being reassessed for “unreported income” when CRA reclassifies shareholder loans as taxable benefits — often without context or understanding of repayment intent. At Mackisen CPA Auditors Montreal, we defend corporations and shareholders from unfair reassessments. Our CPA auditors and tax lawyers document loan agreements, repayment schedules, and corporate resolutions to prove compliance and eliminate penalties. We don’t let CRA treat your cash flow management as misconduct — we protect your structure, your savings, and your reputation.

Legal and Regulatory Framework

Income Tax Act (Canada)

• Section 15(2): Deems shareholder loans to be income if not repaid within one year after year-end.

• Section 80.4: Governs interest benefits from low or non-interest-bearing shareholder loans.

• Section 20(1)(j): Allows deduction of interest on shareholder loans used for business purposes.

• Section 163(2): Imposes gross negligence penalties, which Mackisen can remove through documentation and defense.

• Section 220(3.1): Enables CRA to cancel or reduce penalties and interest under the Taxpayer Relief Program.
  Tax Administration Act (Quebec)
  Revenu Québec enforces similar provisions on shareholder benefits and loans. Mackisen coordinates both jurisdictions for consistent and complete resolution.

Key Court Decisions

Bédard v. The Queen (2022): CRA must prove intent to withdraw corporate funds for personal use before taxing shareholder loans as income.
Thibault v. The Queen (2022): Documented loan agreements protect taxpayers from reassessment.
Guindon v. Canada (2015): Honest administrative or classification errors cannot justify gross negligence penalties.
Venne v. The Queen (1984): CRA cannot rely on assumption — only verifiable transactions can trigger income inclusion.
These rulings confirm that CRA shareholder loan audits can be defeated with proper documentation, repayment evidence, and professional advocacy.

Why CRA Targets Shareholder Loans

CRA views shareholder loans as potential vehicles for undeclared income. Common 2025 audit triggers include:

• Withdrawals from corporate bank accounts without repayment.

• Unrecorded intercompany transfers.

• Missing or incomplete loan agreements.

• Loans to family members or holding companies.

• Failure to charge interest at the prescribed CRA rate.
  CRA assumes benefit — Mackisen proves business purpose.

Mackisen’s Shareholder Loan Audit Defense Strategy

1. Audit File Review: Analyze CRA’s reassessment and identify unverified or misclassified transactions.

2. Documentation Reconstruction: Create or update shareholder loan agreements, repayment schedules, and board resolutions.

3. Repayment Validation: Provide proof of repayment or reclassification to protect against double taxation.

4. Formal Objection Filing: Submit a Notice of Objection to suspend collection and dispute CRA’s assumptions.

5. Penalty & Interest Relief: Apply under Section 220(3.1) for full cancellation of financial penalties.
   Our strategy transforms CRA’s assumptions into proven financial integrity.

Real Client Experience

A Montreal construction company was reassessed $248,000 for “unpaid shareholder loans.” Mackisen provided agreements and repayment logs — CRA cancelled the entire reassessment.
A Quebec holding company was fined $134,000 for “benefits to related parties.” Mackisen proved corporate purpose and CRA withdrew all penalties.

Common Questions

Can CRA tax shareholder loans as income? Yes, if unpaid after one year — Mackisen documents repayment to prevent this.
Can I borrow from my own company? Yes, when structured legally — Mackisen drafts compliant loan agreements.
Can CRA audit loans between family or holding companies? Yes — Mackisen ensures transactions meet fair market and documentation standards.
Can penalties be reversed? Absolutely — Mackisen achieves full relief through the Taxpayer Relief Program.

Why Mackisen

At Mackisen CPA Auditors Montreal, we are Canada’s experts in defending shareholder transactions. Our integrated team of CPAs and tax lawyers ensures every loan, repayment, and corporate transfer stands legally protected and tax-compliant. We act fast, prepare thoroughly, and negotiate decisively — because strategic financing should never become a tax problem. When CRA audits your shareholder loans, Mackisen audits their reasoning.
Call Mackisen CPA Auditors Montreal today for your 2025 Shareholder Loan Audit Defense Consultation. The first meeting is free, and your protection starts immediately.