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

A CRA Worker Classification Audit is designed to determine whether individuals performing work for your business are truly independent contractors or should legally be treated as employees. This classification affects CPP/EI, QPP/QPIP, HSF, payroll taxes, and even director liability.
Mackisen CPA Montreal represents employers during CRA and Revenu Québec worker-status audits, providing evidence-based defense, proper documentation, and preventive compliance strategies that protect your business and directors from costly reclassifications.

Legal Foundation

Law: Income Tax Act ss.5 and 9 (employment vs. business income), 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 CRA’s “fourfold test”: control, ownership of tools, chance of profit, and risk of loss.

Learning insight: CRA doesn’t care about job titles — it cares about how control, risk, and independence function in real life. Mackisen CPA ensures your documentation reflects that reality.

Why CRA and ARQ Conduct Worker-Status Audits

These audits prevent payroll under-remittance and ensure workers receive proper CPP, EI, QPP, and QPIP coverage. CRA selects cases based on data inconsistencies or whistleblower tips.

Common triggers include:

• Repeated T4A payments to the same individuals.

• Contractors performing duties identical to employees.

• Lack of business registration or GST/QST numbers for contractors.

• Anonymous complaints from ex-employees or competitors.

• Payroll totals inconsistent with business volume.

Learning insight: CRA uses data to question dependence — Mackisen CPA uses facts to prove independence.

CRA Worker-Status Audit Process

1. Notice Issued: CRA sends an audit letter identifying the years and workers under review.

2. Document Request: CRA requests contracts, invoices, and payment details for each contractor.

3. Worker Interviews: Auditors may contact individuals directly to confirm control and supervision level.

4. Status Evaluation: CRA applies the Wiebe Door and Sagaz tests to assess employment indicators.

5. Decision and Assessment: CRA may reclassify contractors as employees and issue payroll adjustments.

Learning insight: A worker audit can redefine your relationships — unless your CPA defines them first.

Mackisen CPA’s Audit Defense Strategy

1. Contract Review: Assess every contract for independence clauses, risk distribution, and control structure.

2. Evidence Compilation: Prepare files demonstrating business independence (multiple clients, invoices, tools).

3. Classification Report: Conduct internal Wiebe Door and Québec civil-law tests before CRA does.

4. CRA Representation: Handle all communication, submissions, and responses professionally.

5. Post-Audit Protection: Implement compliant contract templates and tracking systems.

Learning insight: CRA respects preparation. Mackisen CPA ensures every relationship in your business passes the independence test.

Common CRA Reclassification Consequences

• Retroactive payroll taxes for up to 4 years (CPP/EI/QPP/QPIP).

• Interest and penalties under ITA s.227.1 or LAF s.40.

• Personal liability for directors.

• Disallowed GST/QST input tax credits.

• Disruption of contractor relationships and financial planning.

Learning insight: A single reclassification can ripple through your entire tax system — Mackisen CPA prevents that wave before it starts.

Real-World Case Success

• A Québec construction firm avoided $185,000 in reassessments after Mackisen CPA proved subcontractors owned equipment and bore risk.

• A marketing agency defended 17 contractor relationships when we provided valid GST/QST registrations and multi-client proof.

• A tech company cleared a $68,000 payroll adjustment when our CPA team demonstrated contractual and operational independence.

Learning insight: CRA reclassifies when it sees dependency — Mackisen CPA ensures it sees distinction.

SEO Optimization and Educational Value

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Secondary Keywords: CRA contractor status test, Revenu Québec employment audit, Mackisen CPA tax defense, CRA contractor vs employee Canada, QPP QPIP classification.

Learning insight: SEO and audit defense share one principle — clear evidence earns trust. Mackisen CPA delivers both.

Why Mackisen CPA Montreal

With 35 years of combined CRA, ARQ, and payroll compliance experience, Mackisen CPA Montreal is Québec’s trusted defense partner for worker-status audits. Our bilingual CPA team ensures your contracts, policies, and payroll systems meet both federal and provincial standards.
We help employers prevent reclassification and directors avoid personal liability.

Learning insight: Worker-classification audits test your systems, not just your staff. Mackisen CPA makes sure your systems — and your records — are bulletproof.

Call to Action

If CRA or Revenu Québec has questioned your contractor relationships or issued a reclassification proposal, act immediately.
Contact Mackisen CPA Montreal for full worker-audit defense and compliance review.
Phone: 514-276-0808 | Email: info@mackisen.com | Website: mackisen.com

Learning conclusion: CRA Worker Classification Audits test independence through facts, not forms. Mackisen CPA Montreal ensures your business relationships are compliant, your contracts defensible, and your payroll system ready for any audit.