Small Business Audit Survival Checklist 2025 — Prepare, Protect, and Win Against CRA

A CRA audit can strike fear in any small business owner—but it doesn’t have to. In 2025, CRA audits have become smarter, faster, and more data-driven than ever. Using AI and industry benchmarking, the CRA automatically flags anomalies in your filings: unusual deductions, unreported revenue, or inconsistencies between your T2 corporate, GST/HST, and payroll filings. Once flagged, CRA auditors don’t ask if there’s an issue—they ask how big it is.

For many small businesses, a single audit can trigger thousands in reassessments, penalties, and sleepless nights. Yet, 80% of CRA audit issues are preventable with proper preparation, documentation, and expert representation. At Mackisen CPA Auditors Montreal, we prepare small business owners to not only survive audits—but to pass them with confidence. We make sure your books, filings, and documentation stand up to CRA scrutiny and your rights are fully protected.

Legal and Regulatory Framework

Income Tax Act (Canada)
Section 230(1): Requires businesses to maintain complete and accurate books and records for six years.
Section 231.1: Grants CRA the power to examine any business documents, electronic data, or records.
Section 231.2: Allows CRA to compel third-party information (from banks, suppliers, clients).
Section 163(2): Establishes penalties for gross negligence or misrepresentation in filings.

Excise Tax Act (Canada)
Section 286: Requires GST/HST registrants to maintain proper tax collection and remittance records.

Tax Administration Act (Quebec)
Authorizes Revenu Québec to audit, reassess, and impose penalties similar to CRA under Quebec tax law.

Mackisen ensures every client’s corporate and tax documentation complies with both CRA and Revenu Québec laws—protecting your business from audit risk and financial exposure.

Key Court Decisions

Venne v. The Queen (1984): Failure to maintain proper documentation allows CRA to estimate income arbitrarily.
Guindon v. Canada (2015): Negligence penalties are enforceable even without intentional misconduct.
Bédard v. The Queen (2022): Inconsistent GST and income filings justify a full CRA audit and multi-year reassessment.

These cases show that proper preparation is your strongest legal defense.

Why CRA Targets Small Businesses

CRA audits small businesses more than any other group because they often operate with flexible accounting systems and mixed-use assets. Common audit triggers include:

• High or irregular expense claims (vehicle, meals, travel, home office).

• Unreported or inconsistent income between GST/HST filings and corporate tax returns.

• Frequent or large refunds claimed on input tax credits.

• Missing or incomplete source deductions (payroll, CPP/EI).

• Failure to issue T4A or subcontractor slips (T5018) to contractors.

• Mixing business and personal expenses.

CRA auditors now cross-match corporate, personal, and even supplier data to find irregularities—meaning even small errors can attract major penalties.

Mackisen’s Small Business Audit Survival Strategy

1. Pre-Audit Risk Review: Conduct a full forensic review of your financial statements and tax filings to identify weak points before CRA does.

2. Documentation Reconstruction: Organize and reconcile missing receipts, invoices, and tax slips for audit readiness.

3. Expense Validation: Categorize and substantiate every business expense according to CRA rules.

4. CRA Correspondence Management: Mackisen handles all CRA communication and audit requests—so you never deal with CRA directly.

5. Audit Defense and Resolution: Provide full representation during the audit, negotiate outcomes, and appeal reassessments if necessary.

Our goal is not just to survive your audit—but to protect your reputation and prevent future exposure.

Real Client Experience

A Montreal construction company was targeted for a multi-year CRA audit due to irregular vehicle deductions. Mackisen reconstructed five years of books, defended all major claims, and reduced a $92,000 reassessment to zero.
A restaurant owner faced a CRA and Revenu Québec dual audit for cash reporting discrepancies. Mackisen proved legitimate expense ratios, negotiated settlement relief, and secured full business continuity.

Common Questions

How far back can CRA audit me? Typically three years, but up to ten years if CRA suspects negligence or fraud.
Do I have to meet the auditor in person? No. Mackisen handles all auditor communication and submissions on your behalf.
What if I’ve lost receipts? Mackisen helps rebuild missing records using bank statements, vendor files, and digital records.
Can I appeal CRA audit results? Absolutely. We prepare and file formal Notices of Objection and represent you at every appeal stage.

Why Mackisen

At Mackisen CPA Auditors Montreal, we protect small business owners from unnecessary stress, penalties, and financial loss. Our specialists combine audit experience, accounting precision, and negotiation expertise to ensure your case is handled efficiently and discreetly.

We believe that honest business owners deserve protection—not punishment. With Mackisen, your business stays compliant, confident, and ready for any CRA review.

Call Mackisen CPA Auditors Montreal today for your 2025 Small Business Audit Survival Consultation. The first meeting is free, and your protection begins immediately.