CRA International Fraud Auditing – Multi-Entity Defense
Case Overview
Complex multi-entity international tax audit spanning a Canadian subsidiary, overseas corporation, offshore corporation, and offshore trust. Multiple CRA divisions were simultaneously involved in this high-stakes fraud investigation.
Challenge
A CRA international fraud audit involving one overseas corporation, one offshore corporation, one offshore trust, and one Canadian subsidiary. Several CRA divisions were involved. Issues included: a six-year collection demand on the Canadian subsidiary (T106), control of the overseas corporation (De Facto and De Jure control, T1134/T1135), improperly recorded shareholders' loans, ~CAD $4 million in management fees (2013–2022), and offshore trust residency questions (T1141/T1142).
Result
Canadian subsidiary: total owed amount reduced from six digits to less than $1,000. Shareholders' loans: fully accepted by CRA after amendment. Management fees: CRA accepted all ~CAD $4 million across the business group (2013–2022). Offshore trust: resolved in client favor. CRA proposal meeting cancelled — successful defense of further CRA investigation.
The Challenge
Complex international case involving overseas corporation, offshore corporation, offshore trust, and Canadian subsidiary. Multiple CRA divisions involved in fraud auditing.
Our Solutions
Filed appeal per ITA – reduced owed amount from six digits to under $1,000. CRA accepted ~4 million CAD in management fees (2013-2022).
The Resolution
Successfully defended against further CRA investigation. Proposal meeting cancelled.