Taxpayer Relief in Canada

Taxpayer relief  was set up in Canada to allow for the National Revenue Minister to extend relief to the taxpayers from interest charges or penalties in certain situations. These kinds of situations are deemed to prevent individual or business corporations from fulfilling their tax obligations. The special conditions for qualifying for taxpayer relief are extra-ordinary circumstances, other circumstances,  or proven inability  to pay their taxes on account of financial hardship.

Taxpayer relief  will distinguish between waiving or cancelling any penalties and interest charges. Cancellation refers to an interest charge or a penalty which is assessed and the relief may be granted in part or in full by the CRA. Waiver refers to an interest amount or a penalty charge that has not been assessed yet or charged for which relief may be provided in part or in full by the CRA.

Taxpayer relief applies to an individual, employer, corporation, partnership, organisation, trust, or estate as well as to Goods & Services Tax and Harmonised Sales Tax registrant and claimant. The interest charges or the penalties may be cancelled or waived in part or in whole when a taxpayer can prove that the inability to pay is as a result of circumstances beyond his or her control.

Extraordinary circumstances that prevent a taxpayer from filing his or her tax returns may include conditions like man-made or natural disasters like a fire or a flood, civil disturbances or service disruptions. They may also be due to a serious accident or health impairment. Conditions of emotional stress may also qualify such as acute mental distress resulting after a death in the taxpayer’s immediate family. In all these conditions, taxpayer relief will apply.

Some actions by the CRA may also help qualify for a taxpayer relief. The CRA may waive or cancel interest and penalties if they result mainly from CRA actions such as a processing delay which results in taxpayers not getting informed about the tax dues within a specified reasonable time. The actions may also include errors in CRA notices which may lead the taxpayers to file returns on such incorrect notices.

The CRA will grant taxpayer relief by accepting circumstances in which the inability to pay the taxes is confirmed by the taxpayers. Collection of taxes could be suspended temporarily by the CRA as a result of an inability by the taxpayer who has lost employment and is currently going through financial hardship. In such cases, accumulated interest may be waived because of a prolonged case of the taxpayer’s inability to file tax returns due to financial hardship. The financial difficulties may arise out of necessities like food and medical expenses in the absence of a job. It may also be due to other expenses like conveyance and shelter.

Taxpayer relief  is available to all people living in Canada who have been charged interest penalties. The Relief Group does not maintain any inventory for collections and reviews each case on its submission merit without being influenced from the collections diary of the tax collector who has been assigned to a particular case.