What happens if my accountant forgets to file the section 167 election after my business sale closes?

The section 167 election generally doesn't have to be filed with the CRA at the time of the sale, it's typically completed and kept on file by both parties, to be produced if the CRA asks for it, but it still has to actually exist, properly signed by both purchaser and vendor, for the sale to be treated as tax-free. If no election was ever completed, rather than simply not yet sent to the CRA, the transaction is generally treated as fully taxable, meaning HST should have been charged and collected on the eligible assets at closing.

If that's discovered after closing, the practical fix usually involves determining whether a valid election can still be completed and relied on for the transaction, or whether the parties instead need to address the HST that should have been charged, which can mean the vendor facing an assessment for uncollected tax, and the purchaser separately working through whether they can claim input tax credits on tax paid after the fact.

Because the consequences depend heavily on exactly what documentation was or wasn't completed at the time of the sale, and how quickly the gap is caught, this needs to be addressed with the accountant and a tax advisor as soon as the omission is discovered, not left until a CRA review raises it.