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Selected CRA Dispute Results

A taxpayer was selected for a CRA builder audit in respect of the sale of a residential property, with the CRA reviewing whether GST/HST applied to the transaction.

We were retained immediately and prepared an initial submission setting out the relevant facts, the taxpayer’s intention, and supporting documentation.

Following a review of our submission, the CRA accepted our representations and concluded that no GST/HST assessment was warranted.

The audit was closed before any proposal letter was issued.

 

A husband and wife retained us after receiving a proposal letter for a CRA builder audit. CRA claimed they should have collected and remitted GST/HST on the sale of three properties and proposed significant tax assessments.

We prepared detailed legal submissions, demonstrating that:

  • The taxpayers were not builders under the Excise Tax Act.

Following our representations, CRA agreed with our position and determined that the taxpayers were not builders. As a result, CRA did not issue the proposed assessments, and the audits were closed with no taxes owing.

A husband and wife came to us following a CRA builder audit. The CRA determined that they were builders and should have self-assessed GST/HST on two properties, issuing assessments for more than $500,000.
 
We filed a notice of objection arguing that the taxpayers were entitled to the exemption pursuant to subsection 191(5) of the Excise Tax Act. CRA appeals reviewed our detailed submissions and agreed, cancelling the GST/HST assessments in full.

A taxpayer was subject to a CRA builder audit on two properties and was assessed as a builder, with assessments leading to over $650,000 of GST/HST owing. The taxpayer filed a Notice of Objection, but CRA Appeals initially issued a proposal letter indicating they intended to confirm the assessments.

The taxpayer then retained Kirshen Tax Law. On review, we identified key technical flaws in the CRA’s position and prepared detailed representations showing the assessments could not stand.

CRA Appeals ultimately agreed and vacated both assessments, cancelling more than $650,000 of GST/HST liability.

 

A taxpayer came to us during a Canada Revenue Agency audit involving two property sales reported in the 2020 and 2021 taxation years. CRA proposed to treat the sales as business income rather than accepting the principal residence exemption.

We conducted a detailed review of the transactions, including the history, use, and intention behind each property, and prepared targeted written representations addressing CRA’s position.

After reviewing our submissions, CRA accepted that the properties were not held as inventory and did not proceed with reassessments for the 2020 and 2021 taxation years.

We represented a group of taxpayers who were subject to a Canada Revenue Agency (CRA) criminal investigation following the seizure of their records. The CRA initiated an investigation for alleged offences under the Income Tax Act and the Excise Tax Act.

Through strategic legal intervention, extensive communication, and detailed representations, we successfully advocated on behalf of our clients. As a result, the CRA closed its investigation and decided not to pursue criminal charges.

This outcome ensured that our clients avoided criminal prosecution, and we are now assisting with the return of the seized records.

A taxpayer was undergoing a CRA audit regarding the taxability of their income. After a thorough review, we determined that a portion of the income qualified for a tax exemption under section 87 of the Indian Act.

We prepared a detailed submission outlining the relevant legal and factual arguments. Following our intervention, CRA agreed that over $60,000 of the taxpayer’s income was exempt from taxation.

This successful outcome substantially reduced the taxpayer’s overall tax liability and ensured that CRA correctly applied the law.

A taxpayer came to us after receiving a threat letter from the Canada Revenue Agency (CRA) indicating that they could be assessed under section 160 of the Income Tax Act for another person’s tax debt due to a past transfer of property.

We conducted a detailed legal review, gathered supporting documents, and prepared a comprehensive written response. After reviewing our submission, CRA confirmed that it would not proceed with the assessment.

Our intervention helped the taxpayer avoid a potential liability of $45,000.

 

A taxpayer was reassessed following a Canada Revenue Agency (CRA) audit, which determined that over $200,000 in corporate withdrawals should be classified as shareholder benefits and taxed accordingly.

We filed a Notice of Objection and prepared comprehensive legal representations challenging CRA’s position. Following our submissions, CRA Appeals agreed with our arguments and removed the full $200,000 shareholder benefit assessment.

This successful objection prevented a significant personal tax liability and ensured the taxpayer was not unfairly taxed on corporate funds that she loaned in the first place.

A taxpayer was audited by the Canada Revenue Agency (CRA) for cryptocurrency transactions and assessed with a gross negligence penalty of over $470,000, along with interest exceeding $230,000.

We filed a Notice of Objection and successfully argued that the gross negligence penalties were not warranted. As a result, CRA removed the full penalty and adjusted the interest, eliminating over $700,000 in tax liabilities.

A taxpayer was audited by the CRA after selling four properties, with the CRA challenging the taxpayer’s eligibility for the principal residence exemption. The audit resulted in four notices of reassessment that treated the profits from the sales as fully taxable.

We filed a Notice of Objection and prepared detailed legal submissions, explaining the specific circumstances of each sale and demonstrating the taxpayer’s right to claim the principal residence exemption. Following our representations, CRA Appeals agreed with our position and reversed all four reassessments.

As a result, the taxpayer achieved tax savings of over $930,000.

The Canada Revenue Agency audited a taxpayer’s cryptocurrency transactions and reclassified all profits from capital gains to business income, leading to substantial reassessments.

We filed a Notice of Objection and defended the taxpayer’s original position. The CRA ultimately accepted our arguments and fully reversed the reassessments, restoring capital gains treatment.

A taxpayer retained us after being reassessed by the CRA for alleged unreported sales. Following an audit, the CRA determined that the taxpayer owed over $111,000 in GST/HST.

We immediately filed a Notice of Objection and prepared detailed written representations addressing the CRA’s position. The central issue was whether the services provided by the taxpayer were taxable supplies. We demonstrated that the CRA’s characterization was incorrect and that the supplies were not taxable.

As a result of our objection and representations, the CRA fully vacated the reassessment and cancelled the $111,000 liability. Since the taxpayer had made some payments, $21,000 was refunded directly to them.

A taxpayer was audited by the CRA after renovating a residential property and renting it to a tenant. CRA determined that the taxpayer had substantially renovated the home and was therefore required to self-assess GST/HST under the self-supply rules. CRA issued a reassessment totaling more than $285,000.
 
We filed a Notice of Objection supported by detailed legal submissions, explaining why the renovation did not count as a substantial renovation. CRA Appeals agreed with our analysis and cancelled the reassessment in full.

A taxpayer’s corporation was reassessed for unreported income and unremitted GST/HST, with gross negligence penalties applied. Initially represented by another firm, the taxpayer incurred significant legal fees with little progress on her Tax Court of Canada appeal.

Frustrated, she retained us midway through the appeal process. After a careful review of the audit and objection materials, we identified key errors and prepared targeted discovery questions. Once the Department of Justice reviewed our questions, they conceded that the Canada Revenue Agency’s position was indefensible.

We secured a Consent to Judgment that vacated all reassessments, eliminating the alleged income, GST/HST liabilities, and gross negligence penalties in full.

A taxpayer underwent an audit and was reassessed by the Canada Revenue Agency (CRA), which added unreported shareholder benefits and income and applied gross negligence penalties.

She initially filed a notice of objection, but the CRA did not accept her position. Seeking further assistance, she retained another firm to file a Tax Court appeal and begin the litigation steps. However, after 2.5 years without satisfactory progress, she decided to switch representation and hired us to take over her case.

We conducted a thorough review, identified key weaknesses in the CRA’s reassessments, and prepared a settlement offer that was accepted in full by the Department of Justice. As a result:

  • $146,000 in shareholder benefits was completely eliminated;
  • $56,000 in additional income was removed; and
  • All gross negligence penalties were deleted.

While the taxpayer had spent years with the previous firm, we successfully resolved the case in a matter of months.

A corporation was reassessed by the Canada Revenue Agency after its accountant accidentally reported an ordinary dividend as an eligible dividend on a T5 information slip. Although the error was promptly corrected, the CRA refused to recognize the amended filing, confirmed the reassessment, and assessed Part III.1 tax for an alleged excessive eligible dividend.

The corporation retained us to appeal to the Tax Court of Canada. We demonstrated that no eligible dividend had ever been declared and that the reassessment was based solely on a clerical reporting error rather than the underlying facts.

The Department of Justice ultimately agreed to resolve the appeal. A Consent to Judgment was entered allowing the appeal and eliminating the Part III.1 tax assessment in its entirety.

A taxpayer had not filed personal tax returns for ten years, during which he earned over $2,000,000, held offshore property, and had unfiled GST/HST returns. Concerned about the significant penalties and interest that CRA might impose, he sought our assistance.

We prepared and submitted a Voluntary Disclosure Program (VDP) application under the General Procedure. CRA accepted the disclosure, waiving all penalties and significantly reducing interest charges, resulting in a total savings of over $250,000.

A taxpayer came to us after the Canada Revenue Agency (CRA) denied his voluntary disclosure for an unfiled personal tax return. The disclosure had been submitted by a different representative, and CRA rejected it on the basis of prior contact regarding his personal GST/HST returns.

We were retained to handle the second-level review and submitted detailed legal arguments citing relevant case law and CRA’s own guidance in support of our position.

CRA ultimately agreed, accepted the disclosure, and cancelled the associated $45,000 penalty while also providing interest relief.

A taxpayer retained us after their corporation was contacted by the CRA. The taxpayer had not filed personal tax returns for several years and was concerned that the CRA’s review of the corporation would uncover the unfiled personal filings and result in significant penalties and interest.

We prepared and submitted a personal Voluntary Disclosure Program application under the General Procedure, carefully addressing the prior CRA contact with the corporation and establishing that the disclosure remained voluntary. CRA accepted the disclosure, waiving penalties and significantly reducing interest.

A corporation retained us after becoming aware that it had failed to file required corporate information returns and slips for several prior years. Many taxpayers do not realize these carry separate filing requirements and penalties.

We conducted a detailed compliance review, engaged an accountant to prepare the outstanding information returns and slips, and submitted a Voluntary Disclosure Program application on the corporation’s behalf. The disclosure was structured to meet the CRA’s voluntary criteria and to address the potential penalty exposure arising from the missed filings.

CRA accepted the disclosure. As a result, penalties that would otherwise have applied to the unfiled corporate information returns and slips were avoided, and the corporation was brought back into full compliance.

A taxpayer relocated to a non-treaty country in the Middle East but did not notify the CRA. After engaging our firm, we conducted a detailed review of the taxpayer’s residential ties and factual circumstances and prepared a comprehensive residency determination.

Given the absence of a tax treaty, the analysis was more complex and required a careful application of Canadian domestic residency principles. We successfully established that the taxpayer had become a non-resident of Canada for tax purposes. As a result, the taxpayer is no longer subject to Canadian tax on their foreign income.

A taxpayer who had left Canada continued filing and paying taxes as a Canadian resident, unaware she had become a non-resident for tax purposes. After returning to Canada, she consulted with us, and we advised that she should not have filed Canadian resident returns during her time abroad.
 
We submitted residency determination requests to the CRA, confirming her re-entry date as a resident and requesting retroactive recognition of her non-residency. The CRA accepted our position and issued a full refund of the taxes she had paid while living outside Canada.

A taxpayer sought our guidance on properly reporting and filing her taxes. After reviewing her situation, we determined that she was entitled to a significant deduction under the UK–Canada Tax Treaty.

Before processing her return, CRA initiated an audit to review the deduction. We assisted throughout the audit, proving her entitlement to the deduction under the law. Following our representations, CRA accepted the full deduction, resulting in a $96,000 tax refund.

A non-resident landlord had Canadian rental income but had not filed a section 216 election or T1159 returns for several years.

The landlord retained us to seek CRA’s acceptance of the late-filed election and returns under its administrative policy for non-resident landlords.

CRA accepted the late-filed section 216 election and returns for 2016 through 2023, allowing the landlord’s Canadian rental income to be assessed on a net-income basis rather than simply leaving the landlord subject to Part XIII tax on gross rental income.

A non-resident landlord owned Canadian rental property and was subject to Canada’s non-resident withholding tax rules. The landlord retained us to prepare and submit an NR6 undertaking to CRA.

CRA approved the NR6 undertaking, allowing withholding tax to be calculated on estimated net rental income rather than gross rental income.

A taxpayer who relocated to France while remaining employed by a Canadian company sought our assistance regarding tax residency issues during a CRA audit. Upon reviewing the case, we identified that the taxpayer had not received the tax treaty benefits to which he was entitled under the Canada–France Tax Treaty. We advocated on his behalf throughout the audit, and CRA agreed that he qualified for treaty benefits, resulting in a $30,000 tax refund.

A taxpayer received 10 separate TFSA notices of assessment for excess contributions and contributions made as a non-resident, resulting in over $200,000 of CRA penalty taxes.

We prepared and filed a detailed TFSA relief request showing the taxpayer made a reasonable error and acted quickly to fix it. CRA accepted our arguments and eliminated the entire amount.

This successful relief request saved the taxpayer over $200,000.

A taxpayer was assessed for Tax-Free Savings Account (TFSA) contributions made while a non-resident, triggering ongoing monthly penalty taxes under the Income Tax Act.

We prepared and filed a targeted relief request addressing the non-resident contribution rules, the circumstances giving rise to the error, and the steps taken to correct the issue once identified.

CRA granted full relief, cancelled the non-resident penalties, issued reassessments, and refunded all amounts paid.

A taxpayer was assessed for over $93,000 in penalty taxes related to excess TFSA contributions made over a ten-year period. Unaware that relief was available, the taxpayer had already paid the amounts in full.

After retaining our firm on a separate matter, we identified that the taxpayer could qualify for relief. Due to prolonged mental health challenges, the taxpayer did not recall making the contributions and had since lost all funds in the account.

We prepared a comprehensive TFSA relief request, explaining that the excess contribution resulted from a reasonable error caused by the taxpayer’s mental health issues, and that no funds could be withdrawn because the account balance was zero.

The Canada Revenue Agency agreed and cancelled the full $93,000 in penalty taxes refunding the taxpayer in full.
A taxpayer came to us after discovering that his mother had unknowingly made excess TFSA contributions while a non-resident, resulting in significant penalty taxes. She had begun suffering from dementia, did not recall making the contributions, and had not addressed the CRA assessments.
 

We prepared and filed a detailed TFSA relief request outlining the medical circumstances, the reasonable error, and the steps taken once the issue was discovered.

CRA accepted our submissions and cancelled the penalties in full, issuing reassessments and refunds where applicable.

A taxpayer retained us after paying significant tax and interest related to a prior filing issue. We prepared a late election request and detailed taxpayer relief submission outlining the taxpayer’s previous tax payments, the impact of the election on the underlying liability, and additional extraordinary circumstances. The CRA accepted the submissions and late election, cancelled the interest, and issued a refund totalling approximately $1,100,000.

A taxpayer faced financial hardship for several years due to serious medical issues, leaving him unable to pay his outstanding tax debt. As time passed, the CRA added more than $58,000 in interest, making the balance unmanageable.

We submitted a comprehensive taxpayer relief request, clearly outlining his medical and financial circumstances. After reviewing our submission, the CRA cancelled the full $58,000 in interest.

A corporate taxpayer came to us after their initial relief request was denied. We prepared a comprehensive second-level review, which was accepted. The CRA cancelled instalment penalties, instalment interest, and arrears interest for the tax years involved.

A taxpayer approached us after exhausting all options with his GST/HST debt. The debt stemmed from a CRA builder audit and he took the matter all the way to Tax Court. With the dispute resolution process concluded, we assisted in preparing a taxpayer relief request. We detailed the taxpayer’s circumstances during and after the build, providing a comprehensive submission. The CRA accepted our request, granting full interest and penalty relief, resulting in a refund of over $38,000.