Taxpayer relief provisions

The CRA has rules to improve the fairness of the tax system when personal misfortune or circumstances beyond your control make you unable to meet your filing or payment deadlines or comply with certain rules. For example, interest and penalties may be waived if you can show that you were prevented from filing on time due to extraordinary circumstances such as illness, death, or natural disaster. Penalties and interest may also be waived if they arose primarily because of actions of the CRA, such as disruption in services or erroneous information from the tax department in the form of incorrect written answers, errors in published information, or undue delays in resolving an objection or an appeal or in completing an audit. Interest may also be waived in whole or in part if a taxpayer is unable to pay due to financial hardship. Penalties will not generally be waived due to financial hardship.

Individuals and testamentary trusts can also use these rules to apply for a refund for any taxation year that ends in the 10 preceding calendar years, which includes years which would otherwise be statute-barred. For example, you may find that you failed to claim the disability tax credit (see topic 80) in previous years even though you were entitled to do so. Other provisions permit you to amend, revoke or late-file certain prescribed tax elections.

To request this relief, you must either write a letter to the CRA or complete and file Form RC4288, “Request for Taxpayer Relief,” with the CRA, indicating why you think the taxpayer relief provisions should apply to your particular situation. You’ll have to submit receipts or other backup information to support your claim. Relief is not automatic, and the rules are not intended to permit retroactive tax planning. Your tax adviser can assist you in determining whether you’re likely to qualify, as well as in making the application.