Top CRA Audit Triggers 2025

Every year, the Canada Revenue Agency (CRA) and Revenu Québec conduct over 100,000 audits across Canada. In 2025, audit selection is no longer random—it’s driven by data analytics, algorithms, and AI. The CRA can now detect irregularities in income, expenses, and deductions instantly, comparing your filings against national industry benchmarks. If something doesn’t add up, your file will be flagged automatically.

From self-employed professionals to landlords and incorporated businesses, taxpayers across Canada are being selected for audit at record levels. The smallest inconsistency—such as a missing slip, unsubstantiated expense, or a repeated loss—can attract unwanted attention. The CRA’s technology doesn’t just identify errors; it predicts risk.

At Mackisen CPA Auditors Montreal, we help you eliminate audit risk before it starts. Our expert auditors identify potential red flags in your tax filings, ensure your documentation meets CRA standards, and defend your interests if your file is ever reviewed. We turn audit prevention into financial protection.

Legal and Regulatory Framework

Income Tax Act (Canada)
Section 231.1: Grants CRA the authority to examine records, demand documents, and visit business premises.
Section 230: Requires taxpayers to maintain accurate records for at least six years.
Section 163(2): Establishes penalties for gross negligence or intentional misrepresentation.
Section 152(4): Allows reassessment of previous years if misrepresentation or fraud is suspected.

Tax Administration Act (Quebec)
Gives Revenu Québec similar authority to audit individuals and businesses operating within the province.

Mackisen ensures that your filings, receipts, and records are compliant, accurate, and defensible under both federal and provincial audit laws.

Key Court Decisions

Guindon v. Canada (2015): Penalties apply even when errors result from carelessness rather than intent.
Loyola Construction Ltd. v. Canada (1992): Incomplete records empower CRA to estimate income and reassess taxes.
Jordan v. The Queen (2009): CRA may reassess for multiple years if discrepancies are found.

These cases underline one truth—when your numbers don’t match your documentation, the CRA doesn’t ask politely; it reassesses.

Common CRA Audit Triggers in 2025

1. Large or Unusual Deductions: Claiming above-average expenses for your industry (especially meals, travel, or vehicles).

2. Repeated Business Losses: Reporting losses year after year, particularly for self-employed or rental activities.

3. Unreported Income: CRA cross-checks your income with T4s, T5s, T5018s, and third-party reporting data.

4. Cash-Based Businesses: Restaurants, salons, construction, and contractors are high-risk sectors for CRA review.

5. Unsubstantiated Charitable Donations: CRA tracks inflated or suspicious claims.

6. Home Office and Vehicle Claims: Overstated or unverified expense allocations trigger audit reviews.

7. Inconsistent GST/HST and Income Reports: CRA compares your business filings with corporate and personal tax returns.

8. Foreign Asset Disclosures: Missing T1135 or inconsistent international reporting is a major audit risk.

CRA’s AI system analyzes patterns—not just mistakes. Even legitimate claims can appear irregular when they exceed national norms.

Mackisen’s Audit Prevention and Protection Strategy

1. Pre-Audit Risk Analysis: Review your tax history for red flags before CRA does.

2. Documentation Review: Ensure every claim and deduction is fully supported and traceable.

3. Compliance Alignment: Synchronize income, GST/HST, and payroll filings to eliminate inconsistencies.

4. Industry Benchmarking: Compare your financial ratios to CRA audit thresholds.

5. Audit Defence: If audited, Mackisen’s CPA Auditors represent you directly, preparing responses and managing CRA communication.

Our audit-prevention system ensures you stay compliant, confident, and financially protected—no matter your income level or industry.

Real Client Experience

A Montreal contractor was audited for vehicle expenses exceeding industry averages. Mackisen reconstructed mileage logs, justified the claims, and prevented $18,000 in penalties.
A consulting firm was targeted for repeated losses over three years. Mackisen presented documentation proving genuine business development expenses, and CRA closed the audit without reassessment.

Common Questions

Can CRA audit me even if I did nothing wrong? Yes. CRA’s AI-based system flags returns statistically, not personally. Mackisen helps you stay ready.
How many years can CRA go back? Normally three, but up to ten if misrepresentation is suspected.
Can I ignore an audit notice? No. CRA penalties and legal actions apply if you fail to respond. Mackisen manages all correspondence for you.
What should I do if I’m selected for audit? Contact Mackisen immediately. Early professional intervention reduces penalties and stress.

Why Mackisen

At Mackisen CPA Auditors Montreal, we don’t wait for the CRA to knock—we build your defense before they do. Our experts combine audit experience, legal insight, and strategic foresight to protect you from reassessment and preserve your peace of mind.

We serve individuals, corporations, and professionals who value precision, integrity, and protection. With Mackisen, your numbers are solid, your documentation airtight, and your financial future secure.

Call Mackisen CPA Auditors Montreal today for your 2025 CRA Audit Risk Assessment. The first consultation is free, and your protection starts immediately.