CRA Director Liability Audit — Montreal CPA Firm Near You: Shield Your Personal Assets

A CRA Director Liability Audit is one of the most serious reviews a business owner or corporate director can face. It determines whether directors are personally responsible for a company’s unremitted payroll deductions, GST/HST, or QST. Mackisen CPA Montreal represents directors and corporations during these high-risk audits, defending against personal reassessments, garnishments, and bank seizures.

When a corporation fails to remit taxes withheld in trust for the government, the CRA and Revenu Québec can pierce the corporate veil. Directors can be held personally liable under the Income Tax Act, Excise Tax Act, and Tax Administration Act (Québec) unless they can prove due diligence — that they acted responsibly, monitored compliance, and took reasonable steps to correct issues.

Legal Foundation

Law: Income Tax Act s.227.1; Excise Tax Act s.323; Québec Tax Administration Act ss.40–44 — impose joint and several liability on directors for unremitted source deductions, GST, and QST.
Jurisprudence: Soper v. Canada (1997 FCA) — established that directors who demonstrate reasonable diligence can avoid personal liability.
Learning insight: Incorporation limits risk, not responsibility. Mackisen CPA ensures directors demonstrate legal diligence, not financial exposure.

Why CRA and Revenu Québec Conduct Director Liability Audits

These audits often begin after a company’s payroll or GST/QST account falls into arrears.
Key triggers include:

• Failure to remit source deductions or sales tax on time.

• Business insolvency, closure, or bankruptcy.

• Change of directors within a company with unpaid trust accounts.

• Director resignations filed after CRA enforcement notices.

• CRA collections referring accounts to the Director Liability Program.

Learning insight: The CRA doesn’t audit intent — it audits action. Directors must prove consistent oversight and reasonable corrective measures.

Director Liability Audit Process

1. Demand Letter: CRA issues a “Pre-assessment Proposal” warning directors of potential liability.

2. Documentation Request: CRA seeks proof of director oversight — meeting minutes, payment authorizations, or communications showing diligence.

3. Assessment Issued: CRA may issue a Director Liability Assessment for unremitted amounts plus penalties and interest.

4. Defense or Appeal: Mackisen CPA prepares a due diligence defense or formal objection under section 165 of the ITA.

Learning insight: CRA presumes directors are liable; it’s your CPA who proves otherwise.

Mackisen CPA’s Director Liability Defense Strategy

• Timeline Reconstruction: Prove when arrears began and whether directors were in office.

• Due Diligence Evidence: Provide bank records, communications, and board minutes showing oversight and attempted payments.

• Corporate Records Review: Verify official resignation dates and ensure corporate resolutions are properly filed.

• Cashflow and Insolvency Analysis: Demonstrate that financial decisions were made responsibly and transparently.

• Representation in Appeals and Collections: Mackisen CPA manages all CRA/ARQ correspondence and settlement discussions.

Learning insight: CRA can pursue directors for up to two years after resignation. Mackisen CPA ensures your defense file is built before that clock runs out.

Common Director Audit Red Flags

• Payroll or GST/QST remittances stopped before bankruptcy.

• Director resignations filed after debts accrued.

• CRA “Requirement to Pay” notices ignored.

• No board documentation showing payment efforts.

• Directors unaware of trust-fund obligations.

Each of these can lead to personal financial exposure. Mackisen CPA transforms weak governance into a documented compliance story.

Real-World Results

• A Montreal retail director avoided $180,000 in payroll liability after Mackisen CPA proved he delegated remittance duties to a professional payroll firm and verified payments monthly.

• A construction director was cleared after we demonstrated his resignation occurred prior to the period of non-remittance.

• A tech company avoided enforcement when Mackisen CPA negotiated a repayment plan and provided written due diligence evidence.

Learning insight: CRA respects action, not assumption. The more proactive the documentation, the stronger the defense.

SEO Optimization and Educational Value

Primary Keywords: CRA Director Liability Audit, Director Liability Canada, Mackisen CPA Montreal, Payroll Remittance Audit, CPA Firm Near You, CRA Trust Account Audit.
Secondary Keywords: Revenu Québec Director Audit, GST/HST liability defense, CRA payroll penalties, Mackisen CPA due diligence defense, personal director protection.

Learning insight: In SEO as in compliance, consistency builds credibility. Mackisen CPA’s authoritative guidance attracts both clients and search engines.

Why Mackisen CPA Montreal

With over 35 years of combined CPA and audit experience, Mackisen CPA Montreal specializes in defending directors, executives, and shareholders during CRA and Revenu Québec investigations. Our bilingual team understands the legal, financial, and procedural complexities of trust-fund liability cases.

Learning insight: Directors don’t just sign resolutions — they sign accountability. Mackisen CPA ensures that accountability never becomes liability.

Call to Action

If you’ve received a CRA Director Liability Proposal Letter or collection notice, respond immediately. Waiting increases risk and interest accumulation.
Contact Mackisen CPA Montreal to build your due diligence defense and protect your personal assets.
Phone: 514-276-0808 | Email: info@mackisen.com | Website: mackisen.com

Learning conclusion: In a Director Liability Audit, your best defense is documentation and diligence. Mackisen CPA Montreal transforms those into your legal shield — proving you acted responsibly, lawfully, and with integrity.