Canada: Audit

Discovering previously unreported offshore assets or foreign income can instantly trigger significant financial and legal anxiety for Canadian taxpayers.

The Canada Revenue Agency (CRA) employs a sophisticated, risk-based methodology to select taxpayers for a tax audit, ensuring compliance across the vast Canadian tax system.

The Tax Court of Canada’s May 7, 2026 decision in Ontario Tire Stewardship v The King, 2019-1330(GST)G, delivers a significant and taxpayer-favourable interpretation of subsection 296(2) of the Excise Tax Act (ETA).

Canada’s Taxpayers’ Ombudsperson has initiated a systemic examination into delays at the Canada Revenue Agency (CRA), focusing on prolonged processing timelines and deficiencies in complaint-resolution processes.

Cross-border taxpayers, corporations, investors, and high-net-worth individuals increasingly face scrutiny from both the Canada Revenue Agency (CRA) and the Internal Revenue Service (IRS).

The perception that Internal Revenue Service enforcement is stronger than Canada Revenue Agency enforcement is common among taxpayers and advisors, particularly in cross-border contexts.

In 2251102 Ontario Inc. v. The King, 2026 TCC 61, the Tax Court of Canada considered whether a taxpayer can successfully challenge a tax reassessment based on a net worth analysis where the CRA has relied on indirect methods due to inadequate books and records.

As an experienced Canadian tax lawyer specializing in tax audits and investigations, I often advise clients on the critical distinctions between tax audits and criminal investigations under Canadian tax legislation, whether conducted by the Canada Revenue Agency (CRA) or Revenu Québec.

Navigate the complexities of Canadian transfer pricing audits with expert guidance on documentation requirements, CRA audit powers, and privilege protection. Learn strategic approaches to functional interviews, information requests, and compliance obligations while understanding the consequences of non-compliance and proposed legislative changes that could significantly impact audit procedures.