How to Navigate a Revenue Québec Audit Step-by-Step — Montreal CPA Firm Near You

A Revenue Québec (RQ) audit is one of the most stressful situations a business can face. RQ audits businesses of all sizes — from freelancers to corporations — to verify GST/QST compliance, proper invoicing, accurate reporting, and sufficient documentation. Even if you believe your books are clean, RQ may still request proof for every dollar of ITCs/ITRs claimed or tax collected. Their audit standards are extremely strict, and even small bookkeeping errors can lead to reassessments, denied refunds, penalties, and interest. This guide walks you through how to navigate a Quebec sales tax audit step-by-step using the same methodology Mackisen CPA Montreal applies to successfully defend clients.

Why This Matters
Revenue Québec uses advanced algorithms and inter-agency data matching to find discrepancies in:
GST/QST collected vs. filed
ITCs/ITRs claimed
Bank deposits vs. reported sales
E-commerce merchant processor payouts
Interprovincial and digital sales
Any inconsistency can trigger an audit. Businesses that are unprepared often suffer unnecessary penalties or long audit delays. Properly managing an audit ensures you protect your cash flow and compliance file.

Legal and Regulatory Framework
Revenue Québec conducts audits under the Tax Administration Act. GST audits may occur simultaneously under the Excise Tax Act.
Key jurisprudence:
Hickman Motors (1997, SCC): taxpayer bears the burden of proof.
Canderel (1998, SCC): financial reporting must reflect commercial reality.
Lac d’Amiante (2001, SCC): RQ has full authority to reassess when documentation is incomplete or inconsistent.
These cases establish that your documentation is your legal defense.

A Quebec business receives an audit letter requesting two years of invoices, proof of payment, merchant reports, POS summaries, export documentation, and reconciliation worksheets. The business scrambles, discovering missing receipts, mismatched numbers, and inconsistent tax coding. RQ expands the audit into earlier periods, freezes refunds, and begins calculating penalties. This entire nightmare began because documents were not ready and filings contained inconsistencies.

Learning Section: Why RQ Chooses Businesses for Audit
Common triggers include:
Large GST/QST refunds
Repeated amended returns
Late filings
Inconsistent tax collected vs. sales
Cash-heavy industries
E-commerce tax discrepancies
Missing QST self-assessment
Non-resident digital sales
New registrations claiming high ITRs
Understanding triggers helps prevent future audits.

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Step-by-Step: How to Navigate a Revenue Québec Audit

Step 1: Read the Audit Letter Carefully
It will list the years/periods under review, documents requested, deadlines, and auditor contact details. Missing the deadline can result in automatic denial of refunds or estimated assessments.

Step 2: Gather All Requested Documentation
You must provide:
Invoices
Proof of payment
Bank statements
Merchant processor reports (Shopify, Stripe, PayPal)
POS summaries
Contracts and engagement letters
Proof for ITCs/ITRs
Export documentation for zero-rated sales
Reconciliation worksheets
The auditor will verify every item.

Step 3: Organize Documents Professionally
Documents must be indexed, labeled, and separated by category. Disorganized submissions slow the process and increase suspicion.

Step 4: Reconcile All Accounts Before Submission
Your GST/QST collected must match your general ledger, sales reports, merchant payouts, and bank deposits.

Step 5: Communicate Professionally with the Auditor
Answer questions clearly, provide documents promptly, and avoid unnecessary explanations. Every word you say becomes part of the audit file.

Step 6: Respond to Follow-Up Requests Quickly
RQ often sends additional information requests. Quick responses keep the audit moving and reduce escalation risk.

Step 7: Review the Auditor’s Working Paper
Before final assessment, the auditor may present proposed adjustments. You may correct errors or provide missing proof.

Step 8: Receive the Notice of Assessment
This confirms results — refunds allowed, denied, or tax owing.

Step 9: If You, Disagree, file a Notice of Objection
You typically have 90 days to dispute an assessment. Supporting documentation must accompany the objection.

Documentation Section
You must keep:
Sales invoices
Purchase invoices
Proof of payment
Contracts
Bank statements
Merchant summaries
Reconciliations
Export/shipping documentation
Fixed asset invoices
Home office worksheets (if applicable)
Filing confirmations
All must be retained for six years.

Common Mistakes During RQ Audits
Not keeping proper invoices
Missing proof of payment
Using credit card slips instead of invoices
Incorrect tax coding
Not self-assessing QST on out-of-province purchases
E-commerce and POS tax errors
Inconsistent reporting across systems
Late responses to audit requests
Arguing verbally instead of providing documents

Winning With Revenue Québec and Canada
Mackisen prepares a complete audit-defense binder with every invoice, bank proof, reconciliation, and explanation indexed clearly. We handle communication with the auditor and submit documents on your behalf. If adjustments are proposed, we review them for accuracy and challenge errors immediately. Our proactive system resolves audits faster, minimizes penalties, and protects your future compliance.

Mackisen Service Hub
We provide:
Full audit defense
Document preparation and indexing
Reconciliation of all tax accounts
Communication with auditors
Objection filing and litigation support
Corrected and amended filings
Compliance training for staff
With decades of experience, our team shields you from audit stress.

Why Mackisen
With more than 35 years of CPA, audit, and tax-law experience, Mackisen CPA Montreal ensures your Revenue Québec audit is handled professionally, strategically, and successfully. We protect your business from reassessments, penalties, and long-term compliance issues.