What Is a CRA Trust Accounts Examination? And Why You Might Get Flagged

If you’ve been late on your GST/HST or payroll remittances (especially more than once in a row) it might just be a matter of time before CRA calls. CRA has made it pretty clear: if you hit certain red flags, you’re more likely to get selected for what they call a trust accounts examination.

First, What Even Is a Trust Accounts Examination?

A trust accounts examination is CRA’s way of checking that you’re handling payroll deductions, GST/HST, and other collected amounts properly. You’re holding those funds in trust for the government. This means it isn't your money, it's the CRA's. That’s why they take it seriously.

If you collect HST from your customers or deduct payroll taxes from your employees’ paycheques, you’re expected to remit that on time. CRA can and does check whether you’re doing it right.

They even explain it clearly on their site:
→ CRA Trust Accounts Examinations Overview

Why You Might Get Red Flagged

Here’s the part CRA doesn’t hide and it’s something most small businesses don’t realize.

You’re more likely to be selected for an examination if you hit one or more of these red flags:

• Not filing your returns on time, repeatedly
• Being more than 6 months late on your payroll or GST/HST payments
• Having major discrepancies between what you report and what’s expected
• Filing zero returns while clearly operating
• Getting frequent penalty notices

If you’re three years behind on HSTfilings or chronically late with remittances, your file’s probably already on their radar.

CRA Isn’t Hiding Anything

People like to think CRA just "randomly" targets taxpayers. But honestly, they’re surprisingly open about how trust exams are triggered and how they’re conducted. They post publicly, and have a YouTube video:

• CRA's Privacy Impact Assessment on Trust Exams
• CRA Payroll Compliance and Enforcement – YouTube

If you’ve never seen these before, it’s worth reading. It’s basically a public guide to how they choose who gets examined and what happens after.

What Happens in a Trust Accounts Examination?

Usually, CRA contacts you by letter or phone, asking for records. Here’s what they might request:

• GST/HST returns for the last 3 years
• Payroll remittance details for the last 12 months
• Records of payments made to contractors or employees
• Sales summaries for the last 3 years
• Bank statements for every single month
• Every single receipt/expense document

It’s like an audit, but specifically for the “trust” taxes like payroll and GST/HST. And yes, it can lead to penalties and interest.

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What I See As a CPA in Ottawa

A lot of small business owners think trust exams “just happen” out of nowhere. But when I look at the file, it’s usually the same pattern:

"Forgot to file GST for a couple of years."
"Wasn’t sure if I had to send payroll taxes for my employees."
"Just waiting until I catch up with my books."

Here’s an actual question I saw on JustAnswer:

“Forgot to file GST for 2021 and 2022. Nothing has happened yet. Am I in trouble?”

The answer? Possibly. You might not hear anything right away, but CRA runs risk scoring models that flag files with missing or late compliance. Eventually, you’ll get a letter. Or worse, a reassessment and penalties.

More discussion here from Reddit users who’ve gone through it:
→ Reddit – CRA Payroll Audit Question

My Advice as a CPA in Ottawa

If you think you’re at risk or you’ve already gotten the letter do not wait. You need to speak with a CPA in Ottawa right away.

• File your returns, even if you can’t pay right away
• Don’t ignore penalty notices. They often mean something deeper is brewing
• If you’re behind, get advice before CRA contacts you
• Clean up your records. CRA won’t go easy just because it’s messy

Also, if you’ve had poor compliance over multiple years, consider a Voluntary Disclosure. CRA has a whole program for this but once they contact you, it's too late.

Final Word

Trust exams aren’t random. If you’re behind on filings or remittances, it’s a question of when, not if. CRA has made it very public how and why they do this. And if you’re already on their radar, you’re not alone.

I’ve helped businesses across Canada (especially in Ottawa) get back on track after years of missed GST or payroll filings. It’s not fun, but it’s fixable if you deal with it head-on.

If you're already in this situation or you want to avoid it altogether, feel free to reach out. You don’t need to navigate CRA on your own.

More Reading:

• CRA: Trust Accounts Examination Overview
• CRA’s Privacy Report on Trust Exams
• My Blog: Corporation for Day Trading in Canada

Want to talk it through? You know where to find me.

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This is not legally binding tax advice. This is educational analysis. Say hello if you need help.

hello@taxesmadesimple.ca

WhatsApp - 613.600.4194

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