Shelly Glover, MP for Saint Boniface, Man., and James Bezan, MP for Selkirk-Interlake, Man., face being blocked from the House of Commons over the dispute.
Under the Canada Elections Act, MPs who don't comply with the rules for filing expenses can be barred from sitting or voting in the House.
A spokeswoman for House Speaker Andrew Scheer says the office was notified May 23 by Chief Electoral Officer Marc Mayrand that the MPs hadn't corrected their campaign returns.
Scheer is waiting for the court to decide before taking any action, she said.
The MPs have filed applications asking a Manitoba court to order Elections Canada to accept their expense returns and declare that they have "complied with the provisions" of the law.
Glover is disputing the election agency over her 2011 campaign filing. Bezan is fighting over the past three federal election filings, dating back to 2006.
The MPs say in their court filings that Elections Canada "has misinterpreted the requirements" of the law regarding signs that were left over from the previous campaign. The MPs refer to the signs as "non-monetary" contributions.
Glover is also fighting in court over how campaign staff wages are claimed.
Bezan released a statement Tuesday afternoon that alleged Elections Canada has "changed their interpretation of the rules."
"My campaign has complied with the Elections Canada Act. This is an accounting dispute between the campaign and Elections Canada," he said in the statement.
The term "accounting dispute" was one the Conservatives used frequently in defending themselves against opposition questions regarding the "in and out" election spending scandal.
The Conservative Party had used money from local candidates to pay for national advertising, a breach of the election law.
The party pleaded guilty to criminal charges in November 2011 and paid a $52,000 fine.
Bezan says the election agency had approved his 2006 and 2008 campaign returns but changed its interpretation.
"Elections Canada is not being fair or reasonable in their application of the act," he said.
Glover said in a statement that she'll be challenging Elections Canada's interpretation of the law.
"My campaign in 2011 complied fully with the Elections Act. Elections Canada has ordered that I claim expenses that my campaign did not incur, which is not consistent with the act's provisions."
Campaigns refused to make changes
John Enright, spokesman for the election watchdog, says auditors found problems with both returns and requested changes. The campaigns refused to make the changes.
"In these cases, the chief electoral officer wrote to the Speaker of the House to inform the House of the situation so that appropriate action could be taken," he said. "That's where we are."
Enright says the Elections Act is clear: "An elected candidate, a sitting MP, who fails to make a correction requested by the CEO shall not continue to sit or vote as a member until the correction is made."
The next step is up to the Speaker, Enright said.
"The House is sovereign. The House needs to decide. We've informed them this is what the legislation said."
Enright said Elections Canada auditors work with campaigns to reconcile their reports.
"There's often back and forth between that auditor and the campaign to make things right," he said.
"More often than not, it's inadvertent errors, wrong column, inverted numbers, they fix them, they go back and forth.
"If, after that review, the auditor finds that there are errors in the return, there's a request made to the candidate's agent to file a corrected return."
If the campaign doesn't correct the report, the chief electoral officer can make an official request for a correction. If that is refused, the chief has no choice but to notify the Commons.
Enright said candidates can go to court to ask to be excused from complying with a request for a correction.
But that doesn't change the situation about suspension, he added.
"Irrespective if they are before the courts, they didn't satisfy the original request."
Enright said he hasn't done any formal research, but can't remember a similar case.
"I've been doing this for 25 years and I don't recall this having come up."