Section 160 Assessments 2025 — Protect Your Family And Business From CRA Transfer Liability

Few taxpayers realize how easily the CRA can make you liable for someone else’s tax debt. Under Section 160 of the Income Tax Act, if you receive money, property, or assets from someone who owes taxes—even unknowingly—the CRA can come after you to recover the debt. In 2025, CRA’s data systems and property registries are fully integrated, allowing them to track inter-family transfers, business dealings, and asset movements in seconds. If a relative, business partner, or spouse owes taxes, your bank account, property, or inheritance could become their collection target.

These cases are devastating because the law doesn’t care about intent—you can be completely innocent and still be legally responsible. The CRA uses Section 160 to claw back funds, garnish accounts, and register liens against anyone who has benefited from a tax debtor’s transfer. The only defense is professional representation and proof that the transaction was legitimate and at fair market value.

At Mackisen CPA Auditors Montreal, we protect individuals, families, and business owners from Section 160 liability. Our CPA auditors and tax lawyers investigate your case, challenge CRA’s claims, and file objections or appeals that stop unfair collection and restore your financial independence.

Legal and Regulatory Framework

Income Tax Act (Canada)
Section 160(1): Allows CRA to pursue a transferee (spouse, relative, business partner, or corporation) for taxes owed by a transferor if property or money was transferred for less than fair market value.
Section 160(2): Imposes joint and several liability between both parties for the full amount of the debt.
Section 161(1): Adds daily compounded interest on the transferred amount.
Section 152(4): Gives CRA authority to reassess for up to 10 years if misrepresentation is suspected.

Tax Administration Act (Quebec)
Contains similar provisions allowing Revenu Québec to hold transferees liable for another person’s unpaid provincial tax.

Mackisen builds a comprehensive defense that proves transactions were legitimate, commercially reasonable, and compliant with both federal and Quebec law.

Key Court Decisions

Heavyside v. The Queen (1996): Intent is irrelevant—CRA can enforce Section 160 regardless of whether the recipient knew of the tax debt.
Yates v. The Queen (2019): CRA must prove that the transfer occurred below fair market value at the time of exchange.
Bélanger v. The Queen (2021): Transfers between spouses or related parties are automatically suspect unless fully documented.

These cases confirm that documentation and valuation are critical in protecting yourself from Section 160 exposure.

Why Section 160 Is So Dangerous

Section 160 is one of CRA’s most aggressive collection tools because it bypasses normal due process. The CRA doesn’t need a court order—they can immediately:

• Seize funds or property received from the tax debtor.

• Garnish your wages or bank account for their debt.

• Place a lien on your home or investment assets.

• Apply interest and penalties retroactively to the date of transfer.

You could be targeted years later for an innocent transaction—such as accepting a gift, inheritance, or family loan—from someone who owed taxes at the time.

Mackisen’s Section 160 Defense and Prevention Strategy

1. Case Review and Evidence Collection: Analyze the transaction timeline, values, and documentation.

2. Valuation Assessment: Establish that the transfer was made at or above fair market value to refute CRA’s claim.

3. Objection Filing: Submit a formal Notice of Objection within 90 days to pause CRA collection action.

4. Negotiation and Legal Representation: Engage directly with CRA and Revenu Québec appeals officers to present evidence and reduce or eliminate liability.

5. Preventive Structuring: Advise on future transactions, ensuring all family or corporate transfers are compliant and defensible.

Our strategy is built to disarm CRA’s claim at the source—by proving that your transaction was legal, fair, and fully documented.

Real Client Experience

A Montreal taxpayer received a Section 160 assessment for $63,000 after accepting a property gift from her brother. Mackisen demonstrated the transfer was part of a legitimate property settlement and secured full cancellation of the liability.
A small business owner faced CRA action after buying shares from a partner who owed taxes. Mackisen proved the transaction occurred at market value, removing his name entirely from CRA’s collection file.

Common Questions

Can CRA really make me pay someone else’s taxes? Yes—if you received property or funds from a person with tax debt and did not pay fair market value.
What if I didn’t know the person owed taxes? Intent doesn’t matter under Section 160. Mackisen builds your defense around valuation and legal structure.
Can I appeal a Section 160 assessment? Yes, but you must act within 90 days. Mackisen files the objection and represents you before CRA and the Tax Court of Canada.
How can I avoid this in the future? Always document family or business transfers, obtain independent valuations, and consult a CPA before accepting property or cash.

Why Mackisen

At Mackisen CPA Auditors Montreal, we believe no one should pay for someone else’s mistake. Our experts have successfully overturned Section 160 assessments by proving fair-market transactions and procedural errors in CRA enforcement. We act swiftly, strategically, and compassionately to protect your assets and family from unjust financial harm.

We combine legal precision with real empathy—because when CRA targets you for someone else’s debt, you need more than advice—you need defense.

Call Mackisen CPA Auditors Montreal today for your 2025 Section 160 Liability Review. The first consultation is free, and your protection begins immediately.