Tax Page

10/10/2026

Could You Be on the CRA’s Audit Radar Without Knowing It?

As Canadians settle into the Thanksgiving long weekend, the UK’s HMRC recently reported that AI and advanced analytics helped protect or recover £10 billion in tax in 2025–26, a reminder of how data-driven tax enforcement is becoming.

Closer to home, CRA does not publish a fixed checklist of audit triggers. Selection is risk-based, drawing on data matching, industry benchmarks, third-party information and targeted compliance work.

One recurring pattern in CRA audit work is that a file is rarely selected because of one dramatic error. More often, several ordinary pieces of information begin to tell an inconsistent story.

Some of the signals that can matter include:

• Third-party information that does not match your return
• Large changes in sales, expenses or profit margins
• Operating in a cash-intensive industry
• Real estate or related-party transactions that raise questions
• Personal finances that appear inconsistent with reported income
• Previous audit adjustments, non-filing or other compliance issues
• Publicly available information, including social-media activity

The important point is that these factors do not necessarily operate in isolation. A third-party record, unusual expense pattern or lifestyle indicator may mean relatively little on its own. When several pieces fail to reconcile, however, the picture can change quickly.

Tax Tips
The best defence is not trying to guess CRA’s selection process. It is making sure your records, filings and underlying transactions can withstand scrutiny if questions arise.

If historical errors exist, consider obtaining advice about whether they can be corrected before CRA enforcement begins.

Read our full analysis:
https://taxpage.com/articles-and-tips/what-triggers-a-cra-audit-heres-the-list-compiled-by-a-40/

Need help responding to a CRA audit or correcting past tax issues?

Call 416-367-4222 for a FREE 10-minute consultation (Canada only).
Email: [email protected]

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10/01/2026

Changing Corporate Ownership? 5 CCPC Tax Rules You Should Know

Changing who owns shares in a Canadian-controlled private corporation can have tax consequences that go well beyond the transfer itself.

Before bringing in a new investor, transferring shares to family, restructuring ownership or dealing with a non-resident shareholder, here are five issues worth reviewing:

• Control matters. A change in legal or factual control can affect CCPC status.
• Non-resident shareholders can create additional issues. A share sale may involve taxable Canadian property and section 116 compliance.
• The 60-month test can matter. Private-company shares may be taxable Canadian property if more than 50% of their value was derived from certain Canadian real property, resource or timber interests during the relevant period.
• How shares are transferred matters. A sale at fair market value, a gift and a below-market transfer can produce different tax consequences.
• Employee and related-party transfers require care. Depending on the circumstances, discounted shares may give rise to taxable employment or shareholder benefits.

TL;DR
Changing corporate ownership is not simply a corporate-law t:exercise. Who owns the shares, who controls the company, how the transaction is structured and where the company’s value comes from can all affect the tax result.

Read our full analysis:
https://taxlawyer.com/how-to-meet-the-very-high-bar-for-establishing-and-maintaining-canadian-controlled-private-corporation-ccpc-status-plus-corporate-and-tax-implications-of-share-transfer/

Need guidance on a share transfer or CCPC compliance?
Call 416-367-4222 for a FREE 10-minute consultation (Canada only).
Email: [email protected]

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09/15/2026

Can You Lose Money in a Ponzi Scheme and Still Owe Tax?

In some cases, yes.

An investment fraud may look legitimate for years. You may invest money, receive payments described as interest or returns, reinvest some of them, and only later discover that the promised investment activity never actually occurred.

So, if the investment was fraudulent, can the CRA still tax the payments you received?

The answer depends on what those payments actually represented.

Canadian tax law does not automatically treat every payment from a fraudulent investment as taxable income. But discovering that an investment was a Ponzi scheme does not automatically make every earlier payment a tax-free return of capital either.

To illustrate the distinction, consider two simplified scenarios drawn from principles in the case law:

Investor A invests $500,000 under an agreement promising repayment of the principal plus a fixed $75,000 return. If the investor receives that $75,000, it may still be taxable even if the promoter secretly used money from other investors to fund the payment.

Investor B also invests $500,000, but the agreement specifically requires the money to be invested in particular assets to generate a return. Those investments are never made, and $100,000 of the original capital is returned and labelled “interest.”

In that situation, there may be a stronger basis for treating the payment as a return of capital rather than taxable interest.

The key point is that fraud alone does not determine the tax treatment. The legal agreement, what actually happened to the money, the nature of the payment, and what the investor ultimately received can all matter.

There is also a timing issue.

An amount received in an earlier year may be taxable at that time, while the underlying investment loss may only be recognized later and under different tax rules.

So, losing money overall does not necessarily erase the tax consequences of earlier receipts.

Bottom line: do not assume a payment is taxable simply because it was called “interest,” and do not assume it is tax-free simply because the investment later turned out to be fraudulent.

Read our full analysis:
https://taxpage.com/articles-and-tips/how-are-ponzi-scheme-payments-taxed-in-canada-taxable-income-investment-fraud-or-return-of-capital/

Need help understanding the tax consequences of an investment loss or suspected fraud?

📞 416-367-4222 | FREE 10-minute consultation in Canada
📩 [email protected]

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Learn how Canada taxes payments from Ponzi and fraudulent investment schemes, including income, return of capital, bad debts, and investment losses.

09/14/2026

Leaving Canada? You May Owe Tax on Assets You Haven’t Sold

Moving abroad can mark the beginning of a new chapter. But for Canadian tax purposes, becoming a non-resident can also trigger tax on certain assets even if you have not actually sold them.

This is commonly referred to as Canada’s departure tax or “exit tax.”

If you are planning to emigrate, here are 5 important things to know:

1. Leaving Canada does not automatically trigger departure tax.
What matters is when you cease to be a Canadian resident for income-tax purposes.

2. Canada may treat certain assets as though you sold them.
Certain capital property may be deemed disposed of at fair market value, potentially creating a taxable capital gain.

3. Investments, cryptocurrency and private-company shares may be affected.
Non-registered investments and other capital assets can fall within the departure-tax rules.

4. Not everything is caught.
Canadian real estate and registered plans such as RRSPs, RRIFs and TFSAs are among the important exclusions.

5. Reporting and planning matter.
Forms such as T1243 and, where applicable, T1161 may be required. Some taxpayers may also be able to defer payment of departure tax until the affected property is actually disposed of.

Becoming tax resident in another country can also create new tax obligations, making cross-border planning especially important.

Leaving Canada involves more than changing your address. Proper planning before departure can help prevent costly tax surprises later.

Read our full analysis:
https://taxlawcanada.com/cras-deemed-disposition-explained-its-a-departure-tax-for-individuals-emigrating-from-canada-to-live-elsewhere/

Need help with departure tax or non-resident tax planning?

📞 416-367-4222 | FREE 10-minute consultation in Canada
📩 [email protected]

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09/11/2026

As Rosh Hashanah begins this evening, we send our warmest wishes to our clients, partners, team members, and everyone celebrating the Jewish New Year.

May the year ahead bring renewed hope, fresh beginnings, greater ease, and abundance in what matters most.

Shanah Tovah!

From all of us at Taxpage.

09/01/2026

The CRA Looks for These Real Estate Audit Red Flags. Do Any Apply to You?

Last week, the CRA announced the sentencing of a Vancouver realtor in a tax-evasion case involving a residential property.

It’s a timely reminder that, when it comes to real estate, the CRA may look beyond what appears on a tax return.

Some factors that can attract closer scrutiny include:

• Short holding periods before resale
• Significant renovations or development-like activity
• Frequent property transactions
• Reported income that appears inconsistent with property acquisitions
• MLS listings, photographs or social media that contradict claims about occupancy, personal use or the purpose of the property

None of these factors automatically means a taxpayer will be audited. But individually or together, they can give the CRA reason to look more closely.

Consistency matters.

Your financing, occupancy history, renovation activity, public listings and tax reporting should tell the same story.

Tax advice also doesn’t have to begin after an audit notice arrives. For significant or unusual real-estate transactions, early advice can help identify potential exposure before it becomes a dispute.

Facing a CRA real-estate audit or concerned about the tax implications of a transaction?

📞 416-367-4222 - FREE 10-minute consultation
📩 [email protected]

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08/31/2026

Today, we say a fond farewell - and hopefully, a “see you soon” - to our incredible 2026 summer students: Jessica Gan, Zhixian (Jason) Jin, and Maya Caplan.

Over the past few months, they gained hands-on experience in tax research, client matters, CRA interactions, cryptocurrency tax issues, legal writing, and the day-to-day realities of tax practice.

Looking back on their summer, Jessica especially valued working directly with clients and CRA officers on real tax disputes. For Jason, one of the highlights was seeing his research contribute to real client matters. And for Maya, it was helping anxious clients navigate their tax issues and ease the burden of tax debts.

Their advice to future summer students was simple: ask questions, stay curious, seek out different files and lawyers, and make the most of every opportunity to learn.

Thank you, Jessica, Jason, and Maya, for your hard work, curiosity, and dedication throughout the summer.

We wish you all the very best in the next chapter of your legal careers!

08/19/2026

Are Prediction Market Profits Really Tax-Free in Canada?

Not necessarily.

A Canadian taxpayer could earn C$250,000 on Polymarket, Kalshi or another prediction market** and face very different tax consequences depending on how the activity is characterized.

The CRA has not published specific guidance on the Canadian income-tax treatment of prediction markets. That means existing Canadian tax principles have to be applied to an activity that can resemble gambling, investing, trading, or a combination of all three.

Depending on the facts, profits could potentially be treated as:

• Non-taxable windfalls
• Capital gains
• Fully taxable business income

How you conduct the activity matters.

Occasional recreational participation looks very different from frequent trading involving substantial research, forecasting models, repeated transactions and a systematic effort to generate profits.

There is also an important issue involving losses.

If you take the position that your profits are non-taxable windfalls, that same characterization may mean your losses are not deductible. Conversely, treating losses as business losses may strengthen the argument that your profits should also be taxed as business income.

Using cryptocurrency or stablecoins can add another layer.

Funding prediction-market activity with crypto may create separate Canadian tax consequences on the cryptocurrency transactions themselves, in addition to the tax treatment of the prediction-market activity.

And the way you report your profits is not necessarily the final word. The CRA could later reassess and take a different view of how the activity should have been characterized.

If you trade on Polymarket, Kalshi or another prediction market, keep records of your trading frequency, strategy, transactions, funding, holding periods, and gains or losses. Those records may become important in supporting your tax position if the CRA later takes a different view.

Read our full analysis:
https://taxpage.com/articles-and-tips/betting-on-elections-or-sports-how-the-cra-taxes-prediction-markets-and-are-your-prediction-market-gains-tax-free/

Need guidance on the Canadian tax treatment of prediction-market or cryptocurrency transactions?

📞 416-367-4222 — FREE 10-minute consultation
📩 [[email protected]]

Taxpage.com

All the tax help you need.

08/11/2026

Can the CRA Force Your Accountant to Hand Over Your Tax Files?

Yes, but not always.

A taxpayer may work with both a tax lawyer and an accountant, but that does not automatically mean everything shared with the accountant is protected by solicitor-client privilege.

A recent Federal Court decision, Minister of National Revenue v KPMG Canada LLP, T-139-26, brought this distinction into focus.

The CRA was auditing a group of taxpayers for their 2019 and 2020 taxation years and issued a Requirement for Information directly to KPMG Canada.

KPMG resisted production based on solicitor-client privilege asserted by the taxpayers and provided a privilege log covering more than 900 documents. The taxpayers later produced 90 documents voluntarily, but the dispute continued over the remaining material.

The Federal Court ultimately granted the CRA’s application for a compliance order after finding there was insufficient evidence to establish that the outstanding documents were protected by solicitor-client privilege or another recognized privilege.

The key point is this:

Claiming that a document is privileged does not, by itself, make it privileged.

The nature of the professional relationship, the purpose of the communication and the evidence supporting the privilege claim all matter.

Professional confidentiality and solicitor-client privilege are not necessarily the same thing.

In some circumstances, an accountant’s work may fall within solicitor-client privilege where the accountant is retained by a tax lawyer to assist in providing legal advice and the work is genuinely connected to that advice.

But simply having both a lawyer and accountant involved does not automatically make accounting records privileged.

For taxpayers dealing with CRA audits, voluntary disclosures, unreported income or offshore tax issues, understanding this distinction before sensitive records come under scrutiny can be important.

Read the full analysis in the comments.

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08/10/2026

Please join us in welcoming Andrew (Mihnwan) Son and Lucy (Jingwen) Wei, our 2026/2027 articling students!

Each year, we look forward to welcoming new articling students and supporting them as they take an important step from law school into legal practice.

Andrew is a familiar face at Taxpage, returning after previously spending time with us as a summer student. A 2026 Osgoode Hall Law School graduate, he developed a strong interest in tax law and gained advocacy experience representing clients before the Landlord and Tenant Board through Parkdale Community Legal Services.

Lucy, also a 2026 Osgoode graduate, developed particular interests in consumption tax, trusts and cryptocurrency taxation. Having studied and worked in both China and Canada, she also brings an internationally informed perspective to the firm.

We’re delighted to have Andrew back and to welcome Lucy to the team. We look forward to supporting them throughout what we hope will be a rewarding and successful articling year.

Welcome, Andrew and Lucy!

From all of us at Taxpage.

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