Trucking Expenses, Missing Receipts: A Petawawa Reassessment

The situation

Kostas had retired two years earlier after three decades as an early childhood educator, and the household now ran on his modest pension and the income Mai brought home driving long-haul routes out of the Ottawa Valley. Mai's employer, a regional trucking company, issued a signed form each year confirming that Mai was required to pay for meals, fuel, and other costs of the road without reimbursement — the standard declaration that lets an employee claim those costs as employment expenses on a personal tax return. For two tax years, Mai had claimed meal per-diems for days spent away from the home terminal, along with a share of vehicle costs and a few smaller supplies.

The claims were not unusual for the job. Long-haul drivers routinely claim a portion of meals under a simplified method that does not require a receipt for every stop, and vehicle expenses can be claimed against a logbook showing the split between business and personal use. What Mai did not have, by the time the Canada Revenue Agency (CRA) came asking, was a complete logbook. Some months had detailed dispatch records. Others had gaps of several weeks where Mai had simply kept the fuel receipts and trusted memory for the rest.

What the audit found

The reassessment letter arrived on a Tuesday, and Kostas called our office the same afternoon. CRA had selected Mai's return for review as part of a broader look at employment expense claims by drivers, and the audit findings were blunt: without a logbook covering the full period, the reviewing officer proposed to disallow the vehicle expense claim almost entirely, and to reduce the meal claim to only the days that could be matched against dispatch and fuel records. Interest had been accruing since the original filing dates, and across the two years under review the proposed additional tax owing, before interest, came to roughly $27,000. With interest added, the number CRA put forward was closer to $34,000.

For a household living on a pension and one income that varied with the freight market, a bill of that size was not an inconvenience — it threatened to force a line of credit, a delayed retirement plan, or worse. Kostas and Mai's instinct, understandably, was to simply accept the number and set up a payment plan rather than fight it. Before agreeing to anything, they came in for a review of the file.

What the review found was a middle ground CRA's initial position had not accounted for. The audit had treated the incomplete logbook as if it meant no logbook existed at all, disallowing months where partial records — dispatch sheets, fuel card statements, and hotel receipts — could still support a reasonable estimate of business use. CRA is not required to accept an incomplete record, but the law does not require perfection either; it requires a taxpayer to establish their expenses on a balance of probabilities, using whatever credible evidence is available. An incomplete logbook, paired with corroborating records, is often stronger evidence than CRA's first assessment gives it credit for.

What we did

1. Filed a Notice of Objection before the deadline. A taxpayer who disagrees with a reassessment has a strict, limited window to file a formal objection with the CRA Appeals Branch. Missing it forecloses most further review short of court, so this came first, before the underlying numbers were even fully sorted out.
2. Rebuilt the record from what actually existed. Rather than treating the missing months as a lost cause, we worked with Mai to assemble every fuel card statement, dispatch confirmation, weigh-station record, and hotel receipt still available, and cross-referenced them against the employer's trip logs, which Linh, the dispatcher at Mai's trucking company, was able to pull from the company's system on request. This did not produce a complete logbook — it produced a defensible partial one, with the gaps clearly identified rather than papered over.
3. Framed the meal claim around what the reconstructed records actually showed. Instead of arguing for the full original claim, we recalculated the number of away-from-home days that could be corroborated by the trip logs and fuel purchases, and presented that reduced but well-supported figure as the realistic claim — a stronger negotiating position than defending numbers we could not back up.
4. Negotiated directly with the CRA Appeals officer assigned to the file. Objections are reviewed by an appeals officer independent of the original audit, and that officer has real discretion to settle on principled numbers rather than simply upholding or reversing the audit outright. We presented the reconstructed records, walked through the corroboration for each disputed month, and proposed a settlement based on the days and mileage that could actually be supported.
5. Advised on the vehicle expense claim separately. The vehicle costs were harder to save, since the missing months had no fuel-card or dispatch corroboration at all for personal-versus-business use. We recommended conceding that portion rather than spending further time contesting a claim with no supporting record, and focused the negotiation on the meal expenses where the evidence was genuinely strong.

The outcome

The appeals officer agreed to restore roughly two-thirds of the meal expense claim for the months with corroborating fuel and dispatch records, while upholding the disallowance for the months with no supporting documentation at all, and for the vehicle expense claim in its entirety. The net effect was a reduction in additional tax owing from about $27,000 to roughly $13,500, with interest recalculated on the lower balance — bringing the total amount actually payable to just under $18,000, down from the original $34,000 figure.

That is not the outcome Kostas and Mai had hoped for when they first called. It is real money, arranged through a payment plan with CRA that stretched the balance over the following year without adding further penalties, on top of an already tight retirement budget. But it is roughly half of what the initial reassessment demanded, and it was achieved without a Tax Court appeal, which would have meant more time, more cost, and no guarantee of a better result given how thin the documentation was for the disallowed months.

The lesson for the household was a hard one, and we did not soften it: the money lost on the vehicle claim and the undocumented months was lost because the records simply were not there, not because CRA acted unreasonably. Once the gap in the logbook existed, no amount of negotiation could fully undo it. What the objection process did was make sure CRA's original position — treating a partial record as no record at all — did not stand unchallenged, and that every dollar of the final bill reflected an evidence gap Mai and Kostas actually had, rather than one CRA merely assumed.

What you can learn from this