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Important Factors about Taxpayer Relief Canada

In an ideal world, tax will be affordable, and will be paid on time so as there will not be a penalty or interest added to the account. This will not always be possible especially when there is a recession and everyone is finding that money is tight. When payment is not made or is made late there will be additional charges added and this will make it even harder to pay. If you have got into a situation where the bill has not been paid and you have been hit with charges, then it is possible to apply for taxpayer relief Canada.

If you do require assistance for tax debts, taxpayer relief Canada does have a well thought out and well presented system of providing it. Although they will not agree to lower the amount of tax principle you owe, it will be possible to have the amount of interest reduced and in some cases extra amounts in the form of penalties can be reduced.

When dealing with taxpayer relief Canada application,  our well experienced tax consultants will review the request first and decide if the relief can be provided. The Minister of National Revenue is the entity who is responsible for making the decision and they have the authority to either grant total removal of the penalties and interest that has been added or at least a proportion of it.

There is more chance of receiving the taxpayer relief Canada approval if you do not make the request yourself but make it through a third party. The best people to contact for help will be professionals who have a great deal of knowledge when it comes to Canadian tax law, and also have experience of dealing with the CRA.

The advice that you will be given is to file your tax returns anyway as at least this way there will not be a late filing fees. It is not possible to be considered for taxpayer relief Canada if not all of the relevant papers have been disclosed.

There are many reasons why relief may be given and a wide range of issues are covered. Firstly it can be a natural disaster that is responsible for the return not being made on time. When considering taxpayer relief Canada law allows for the destruction of records, secondly if it is the fault of the CRA and this will cover things such as delays in informing the resident what their obligation was or not answering queries in a timely manner. Thirdly, financial hardship will be taken into account but this will have to be proved. It will be when it is not possible to pay to keep a roof over your head and feed the family.

There is a final category that means you may receive taxpayer relief Canada, and that will include everything not covered by the others, as long as it is an extraordinary reason. The tax specialists you work with will be able to tell you what they are, and that is why working with a tax professional is so important.

What is a Canadian Taxpayer Relief

Canadian Taxpayer relief refers to reaching a negotiating with the CRA where the debt issue is resolved through waiving or cancelling off the interest or penalty amount from the actual payable taxes of a debtor. Canadian taxpayer relief program was designed to offer relief to taxpayers who were unable to pay their tax debt s owing to

– Any extraordinary circumstances

– An action of the CRA (Canada Revenue Agency)

– Financial hardships resulting in inability to pay off debts

– Other similar circumstances

Canadian tax relief for a debtor is specified differently under cancelling of the debt and wavering of the tax debt. By cancelling of a tax debt it is meant that the already levied penalty or interest on a taxpayer is cancelled either in whole or partially, however wavering of taxpayer debt allows amnesty or relief from a future interest or penalty that will be levied.

As listed above one way of Canadian taxpayer relief is wavering or cancelling of interest and penalty owing to extraordinary circumstances. These extraordinary circumstances include

– occurrence of an accident or any illness

– facing disasters that are either natural or manmade such as floods, fires, etc

– any civil disturbance incidence that cause disruptions in any one or many services such as strikes in postal service         and

– Severe mental or emotional distress such as death of a close or immediate member of the family.

 

Further on actions of the CRA that allow Canadian taxpayer relief include

– Any error present in the CRA material that resulted in a taxpayer filing a return of any payment that was based on any incorrect information

– Any processing delays that resulted in not informing of the taxpayer and the assigned time of paying owed amount was over.

– Processing error

– Any incorrect information to a taxpayer usually in writing by CRA

– Any undue delay in audit completion or resolving of an appeal or objection

– Any information delays that hinder taxpayer from paying his dues on time.

 

These are the conditions besides proved inability to pay taxes and other circumstances that make a taxpayer eligible for Canadian tax relief.

There is a common misconception that taxpayer relief can be obtained only once and so giving it the best shot once is always a good idea. This is not true as tax relief can be applied for by individuals as many times as they are warranted for it. That is when any of the above mentioned conditions are present Canadian taxpayer relief can be applied for.

Also applying for a Canadian taxpayer relief through not filing the tax returns initially and then later on proving bankruptcy or inability to pay will not render a taxpayer eligible for the Canadian tax relief. Not filing taxes is an offense and can be prosecuted. It is essential to file all outstanding returns before filing for the Canadian taxpayer relief program as it will not be considered until everything is up to current.

Also any birth disability with an individual will not make him eligible for a Canadian taxpayer relief program as if he or she has managed to pull it this far they can do it in future as well. Since filing for taxpayer relief is a very complex process, hiring the service of a tax expert company such as Tax SOS will help you in following the right direction and ultimately success in getting the Canadian tax relief if you qualify for it.

 

Summary

Canadian taxpayer relief program was designed to relieve tax debtors from paying interest and penalties that are levied on them that were either due to an error of the CRA, inability to pay off, an extraordinary occurrence or some other circumstances. CRA allows tax relief to any individual as many times as he proved to be worthy of it.

What can be claimed as Taxpayer Relief Help?

Taxpayer relief help can be given in conditions where some actions of the CRA have come in the way of the taxpayer’s obligations. Other conditions that apply for seeking taxpayer relief help could be inability to pay on part of the taxpayer due to financial hardship and through circumstances arising out of natural calamities or civil disturbances and disruptions.

CRA may cancel or waive certain penalties and interest charges when they affect a taxpayer’s ability to pay the taxes resulting mainly from actions of the Agency itself such as delays in processing. Such delays may result in the taxpayers not getting informed within a reasonable time period, stating the amount of tax to be paid. The delay in the relaying of information can result in the taxpayers not being able to pay their taxes within the time limit allowed.

The actions of CRA could also be erroneous, leading a taxpayer to file the tax return or make payments, guided by information which may be incorrect. The errors also could be in the processing of the notices. Other actions of the CRA that could have an impact on the taxpayer relief help would be a delay in the resolution of an appeal or a Notice of Objection or in the completion of a tax audit.

CRA also considers waiving or cancelling the interest charges and penalties where an inability is proven and confirmed by the taxpayer who may be experiencing financial hardship. In these cases, the penalties could be waived or cancelled in part or in whole towards their tax obligations. CRA reviews the case if the taxpayer is not able to make the tax payments or negotiate payment plan schedules as the interest charges make up a considerable portion of the payment amount.

As a part of the taxpayer relief help, CRA will assess that the accumulated interest payment would result in an extended inability on the part of the taxpayer, resulting in financial hardship and a burden on the provision of basic necessities like food, medical help and conveyance or shelter expenses. In such cases, taxpayer relief help is provided by considering cancellation of all or a portion of the entire accumulated interest amount.

It has to be noted that CRA would not consider a cancellation of a penalty as a result of the taxpayer being unable to pay the taxes because of financial hardship, unless it can be proved that it was due to extraordinary circumstances which prevented tax compliance. This could be because of natural disasters or in special cases where a business experiences severe financial difficulty. Enforcement of penalties would affect the continuity of that business’ operations, resulting in the employees losing their jobs or the community’s welfare being jeopardised. In these cases, penalties could be waived as taxpayer relief help.

It is a wrong notion on the part of some Canadians that the taxpayer relief help is a program that is allowed on a one-time basis. This is not true, as all residents who have been charged interest or penalties carry the right to seek relief every time that it is warranted. The taxpayer relief help group does not maintain any inventory of collections and it will review cases on their submission merit and not by any influence of a collection diary.

Taxpayer Relief on Account of Natural Disasters

Many Canadians are not aware that taxpayer relief could be available to them in circumstances where the taxpayers are late when filing their GST returns or in remitting the required GST as a result of the disruptions that are caused by natural calamities and disasters.

Natural disasters could strike anywhere. You can take the example of the worst flooding that Alberta was affected a while ago. It is important to note that, as far as tax obligations are concerned, if you are unable to fulfill your tax obligations due to any natural disaster like flooding, taxpayer relief may be available to you from the CRA.

The Canada Revenue Agency has also reminded the taxpayers in the country of the availability of the provisions of taxpayer relief to them in respect of the flooding some seven months ago. There is a taxpayer relief provided for corporations who were unable to file the T2 taxation returns. The taxpayer relief provisions are available to all the taxpayers and they will include individuals, organizations, partnerships, trusts and also the GST/HST registrants.

In normal circumstances, when a taxpayer does not file the tax returns and remit the correct sum of taxes to the CRA as it is required by law, he or she is going to be subject to a specific penalty of a fixed sum along with the interest charges on the balance of the tax amount outstanding. The taxpayer relief provisions allow for the cancellation or the waiver of interest and the penalties in part or in full.

The cancellation will refer to the interest and the penalties which have already been assessed for which the taxpayer relief is granted while the waiver will refer to the interest and the penalties that have not been assessed yet for which the relief is granted.  The taxpayer relief provisions are not restricted to any particular situation although CRA has made it clear in its publications that the provisions will apply in three broad categories. These are:

  1. Circumstances which are beyond the control of the taxpayer including events such as natural disasters.
  2. Errors or mistakes committed on part of the CRA’s actions.
  3. Inability to pay by the taxpayer on account of financial hardship.

The taxpayer relief provisions are not applied by the CRA automatically. The taxpayer has to request the application of these provisions as per the category of the `Circumstance’ and it has to be applied on CRA’s required form along with the contact information, Social Insurance Number or the GST/HST Registration Number, the taxation years that are involved, giving full details of the facts and the reasons behind the Circumstance. The details will have to include how the circumstance has had an impact on your ability to meet the tax obligations with relevant documentation as a support. It has to be accompanied by planned steps that will be taken to resolve the inability to comply.

For taxpayer relief periods, initially CRA allowed only past ten years of tax owing and would disallow relief request for any tax debts owed more than ten years ago. Recent court case changed the direction and forced CRA to extend the time period to more than ten years. However, the penalties or interest relief only applies to last ten year taxes owed although the tax debts was started more than ten years ago.