August 21, 2020
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What is a Remission Order?
Taxpayers who have exhausted all available avenues of relief from a tax liability potentially have one last remedy for hope: an application for a remission order. Today’s blog is dedicated to helping you figure out how to navigate and file an application.
A remission order is a remedy available under subsection 23(2) of the Financial Administration Act that provides the Governor in Council the power to grant relief from tax, or penalty (including any interest) where the collection of the tax or the enforcement of the penalty is unreasonable, unjust or contrary to public interest. Unlike the Taxpayer Relief Program, remission orders do not have a limitation on which tax years they can grant relief.
Process for Filing a Remission order
A remission order must be recommended to the Governor in Council by the Minister of National Revenue who heads the Canada Revenue Agency (CRA). As a result, in order to start the process, taxpayers must file an application for a remission order with the CRA’s Remissions and Delegations Section of the Legislative Policy and Regulatory Affairs Branch of the CRA. Once an application is submitted, a CRA officer reviews the case, makes a decision and then informs the applicant of the outcome.
In general, remission orders will only be recommended by the Minister once all available avenues have been exhausted including objections, appeals and taxpayer relief requests. In addition, the application must demonstrate that a remission order is necessary because the taxpayer meets one of the following circumstances:
- unintended results of the legislation;
- financial setback coupled with extenuating factors;
- incorrect action or advice by CRA officials; or
- extreme hardship.
Should the applicant disagree with the decision of the CRA, they may request a judicial review of that decision in the Federal Court – a process akin to an appeal. The court analyzes the facts of the case determines whether the CRA exercised its discretion properly. Should the court decide in the taxpayer’s favor, the matter is referred back to the CRA for reconsideration.
Remission orders are complicated and a taxpayer’s final chance at relief from a tax debt. Taxpayers are encouraged to seek professional advice prior to applying for a remission order. The professionals at Tax Solutions Canada have significant experience in preparing remission order applications and can provide a free consultation to discuss your specific circumstances and eligibility.