Success Story: Recovering $20,000 in GST/QST Refunds for a Small Business

A small Montreal-based business was struggling with cash flow and couldn’t understand why its GST/QST refunds were consistently being delayed, reduced, or denied. The owner suspected something was wrong with the bookkeeping but did not realize the full extent of the problem until Revenu Québec issued a verification notice. What followed was a complete financial turnaround resulting in more than $20,000 in recovered GST/QST refunds.

This success story shows how the right accounting intervention transformed a stressed business into a compliant, refund-positive operation.

The Problem

The business had several issues that prevented it from receiving the refunds it was entitled to:
• missing supplier invoices
• recurring SaaS and software receipts not downloaded
• POS reports not matching sales recorded in the books
• incorrect GST/QST tax codes in the accounting system
• expenses categorized incorrectly
• duplicated or missing transactions
• incomplete reconciliation of bank deposits

As a result, Revenu Québec flagged the account and placed all refunds on hold.

The Audit Trigger

Revenu Québec selected the business for verification because:
• refund amounts were unusually high
• documentation did not support ITCs/ITRs claimed
• GST/QST filed did not align with bank activity
• repeated adjustments indicated reporting issues

The auditor requested:
• all supplier invoices
• contracts and purchase agreements
• proof of payment
• Excel-based ITR/ITC schedules
• sales summaries
• bank and credit card statements

Refunds for two quarters were frozen pending review.

How Mackisen Rescued the Situation

Step 1 — Complete Documentation Reconstruction

Mackisen rebuilt the business’s financial records:
• downloaded missing invoices from SaaS and suppliers
• contacted vendors for duplicates
• reconciled every bank deposit and withdrawal
• supported all ITR and ITC claims with organized backup

An audit-ready binder was prepared and submitted.

Step 2 — Correcting Tax Coding

The accounting system had:
• GST-only coding
• missing QST
• tax-inclusive entries
• personal expenses mixed with business ones

These issues were fixed, and tax codes were standardized for future filings.

Step 3 — Eliminating Ineligible ITCs/ITRs and Strengthening Valid Ones

The original filings mixed:
• personal expenses
• undocumented purchases
• non-creditable items

Mackisen removed invalid claims and properly documented all eligible expenses, strengthening the refund claim.

Step 4 — Working Directly with the Auditor

The CPA team:
• responded promptly to every RQ request
• clarified supplier information
• explained discrepancies
• provided organized documentation
• ensured the auditor understood the nature of the business

Professional communication reduced the scope of the review.

The Outcome

After submitting the corrected files:
• the business recovered more than $20,000 in GST/QST refunds
• all previously frozen refunds were released
• no penalties were imposed
• future refund cycles became significantly faster
• Revenu Québec closed the verification with no further action

The business now enjoys a clean account and predictable cash flow.

Key Lessons

• Missing invoices and incorrect tax codes are the main causes of refund denials
• Reconciliation is essential for audit-proof filing
• Organized documentation leads to faster results
• A CPA can recover refunds that businesses lose due to bookkeeping errors

Real Client Insight

“I thought I was doing everything right, but I didn’t realize how badly my bookkeeping was hurting my refunds. Mackisen literally saved my business.”
 Startup Owner, Montreal

Common Questions

Why were my refunds held in the first place?
Because documentation did not support your ITCs/ITRs.

Can a business get refunds without sales?
Yes if expenses relate to taxable activities.

How long does refund verification take?
From 1 week to several months depending on documentation.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps businesses recover lost GST/QST refunds, correct bookkeeping issues, and prevent future refund delays. We turn refund problems into refund success stories.