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Published: February 10, 2022

Last Updated: October 21, 2022

Case Issue
CRA’s Collections Division attempted to collect corporate taxes against a shareholder of a dissolved corporation. The collections officer examined bank statements of the corporation obtained directly from the bank and alleged non-arm’s length transfers and proposed to assess the client personally for the income taxes owed under section 160 of the Income Tax Act.

Our office conducted a line-by-line counter analysis and proved that the transfers were actually repayments of the shareholder’s loans to the corporation by paying legitimate business expenses using his personal credit card.

CRA deemed the proposed assessment of $419,021.22 unwarranted and reduced it to $0 without doing any further evaluation.


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