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ARTICLE · 11 SEPTEMBER 2025

Controlling CRA Exposure: Pre-Audit To Audit (Overview)

Counter Tax Litigators LLP
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Private businesses - those with annual revenues typically ranging from $10 million to $250 million - form the backbone of Canada's private sector, contributing significantly to economic growth.

CanadaTax
Counter Tax Litigators
Counter Tax Litigators
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Executive Summary

Private businesses - those with annual revenues typically ranging from $10 million to $250 million - form the backbone of Canada's private sector, contributing significantly to economic growth. However, they are increasingly in the Canada Revenue Agency's (CRA) audit crosshairs, particularly those with complex tax structures, intercompany transactions, and material deductions.

The CRA applies predictive audit models to identify higher-risk businesses for review, with medium-sized corporations ($20M-$250M revenue) flagged for deeper scrutiny. While audits aim to close the $2.7 billion to $3.5 billion corporate tax gap among SMEs, they often lead to CRA "review to contest" audits, aggressive reassessments, and prolonged disputes.

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