Using an Accountant: Documentation Wins in Court

A July 31, 2026 Tax Court of Canada case reviewed CRA's denial of more than $100,000 of expenses connected with a failed pizza-shop partnership. Two taxpayers had each claimed $50,922 of expenses on their 2017 returns, generating non-capital losses applied against income in later years.

What Went Wrong?

CRA denied the claims because the original invoices were unavailable. The taxpayers explained that a flood had destroyed the records relating to the shop's 2013 and 2014 build-out. The business had also closed and its assets had been seized by the landlord.

Taxpayers Win

The taxpayers' accountant produced a contemporaneous summary prepared around 2014 or 2015 from the original invoices. It listed transaction dates, suppliers and amounts paid for leasehold improvements. The taxpayers also provided construction photographs and recovered several invoices and documents from an old computer.

The court found that this evidence, particularly the accountant's detailed summary, sufficiently established the costs. Both appeals were allowed in full.

Action: Maintain organized accounting records and independent supporting documentation. Professional records can be particularly valuable when original documents are later lost or damaged.