CRA Worker Classification Audit — Montreal CPA Firm Near You: Employee vs Contractor

A CRA Worker Classification Audit determines whether individuals providing services to your business are truly independent contractors or legally employees. This decision affects CPP and EI deductions, payroll taxes, and your exposure to retroactive assessments. Mackisen CPA Montreal helps businesses prepare, defend, and document contractor relationships so that every classification meets federal and provincial standards—protecting you from reassessments and penalties.

Legal Foundation

Law: Income Tax Act s. 5 and s. 9 (income from employment vs business); Canada Pension Plan s. 21; Employment Insurance Act s. 82; Tax Administration Act (Québec) arts. 40–44.
Jurisprudence: Wiebe Door Services Ltd. v. MNR (1986 FCA) — established the four-factor test of control, ownership of tools, chance of profit, and risk of loss to determine worker status.

Learning insight: CRA doesn’t care what you call someone on a contract — it cares who controls the work and who bears the risk.

Why CRA Audits Worker Classification

The CRA and Revenu Québec use data analytics and T4A reporting to identify potential misclassifications. If a contractor appears to function like an employee — working under direction, on a schedule, with exclusive commitments — the agency may reclassify them, triggering years of payroll arrears.

Common CRA audit triggers include:

• High contractor ratios compared to employees.

• T4A slips issued to the same individual year after year.

• Anonymous tips from former workers or competitors.

• Contracts lacking clear termination or independence clauses.

• Industries with frequent contract reclassification (construction, IT, transport).

Learning insight: In CRA audits, independence is proven by facts, not form. Mackisen CPA documents both.

What Mackisen CPA’s Worker-Status Audit Defense Includes

1. Contract Review — Evaluate control, ownership of tools, and risk distribution.

2. Evidence Compilation — Invoices, communications, insurance certificates, and business registrations that prove independence.

3. Reclassification Risk Assessment — Identify workers most likely to be flagged and create defensive documentation.

4. Representation Before CRA/ARQ — Submit CPA-certified responses and legal analyses under Wiebe Door.

5. Preventive Framework — Design future contracts and policies to avoid repeat exposure.

Learning insight: A contract proves intention; invoices and behaviour prove reality. Mackisen CPA aligns both before CRA arrives.

Consequences of Misclassification

• Retroactive CPP and EI assessments (up to 4 years).

• Employer penalties and interest for failure to withhold.

• Employee benefit reinstatement liabilities.

• Personal director exposure under ITA s. 227.1.

Learning insight: The cost of calling a worker a “contractor” without proof is measured in years of arrears.

How Mackisen CPA Prepares and Protects You

• Perform a forensic payroll reconciliation of contractor payments.

• Validate business-number registrations and GST/HST charges.

• Build independence files for each contractor (insurance, equipment, multiple clients).

• Train HR and finance teams to apply CRA tests in hiring and contracting.

• Respond to CRA auditors with evidence-driven explanations and legal citations.

Learning insight: Reclassification isn’t about how people are paid — it’s about how they work. Mackisen CPA shows the CRA the difference.

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Learning insight: The CRA looks for control, dependence, and integration. Mackisen CPA proves autonomy, risk, and independence.

Real Client Success

• A Montréal construction firm avoided $180,000 in reassessments after Mackisen CPA proved its subcontractors owned their equipment and worked for multiple clients.

• A digital agency preserved its freelancer model by re-drafting contracts and submitting proof of independent risk sharing.

• A consulting network recovered $65,000 in wrongly assessed CPP/EI contributions after our CPA team demonstrated commercial independence.

Learning insight: Worker classification issues don’t destroy businesses — they expose their documentation gaps. We close them.

Why Mackisen CPA Montreal

With over 35 years of combined experience in tax law, payroll compliance, and audit representation, Mackisen CPA Montreal has successfully defended hundreds of employers in CRA and Revenu Québec worker-status audits. Our bilingual CPA team builds contract frameworks, reconciles payroll records, and creates legal audit files that satisfy every agency.

Learning insight: In tax law, the strongest defense is clarity. Mackisen CPA gives you that clarity before CRA asks the question.