How to File a Request for Taxpayer Relief
The CRA’s Taxpayer Relief Program can result in a reduction or elimination of penalties and interest. Proving eligibility for the program can be difficult as you must have a strict set of extraordinary circumstances that contributed to your inability to pay.
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Requesting Taxpayer Relief
If you owe a large amount of tax debt, it can be very difficult to repay your debt. This situation is made even more difficult by the fact that the Canada Revenue Agency (CRA) charges significant interest and penalties on outstanding tax debt.
If you want to know how to file a request for taxpayer relief, it’s important to first understand the program. First of all, the CRA does not reduce the overall amount of tax debt that you owe. In the agency’s eyes, this money is owed to it and it expects to collect. What the Taxpayer Relief Program can possibly do is reduce or eliminate penalties and interest charges on your debt. Depending on how much you have accumulated in penalties and charges, you could save a significant amount.
It’s also important to know that the CRA will only offer relief in certain situations. These situations include:
- Actions of the CRA that made it difficult or impossible to pay your tax debt on time
- This includes processing delays, errors in processing, CRA misinformation, delays in providing required information, and other such situations.
- Serious financial hardship
- If the payment of the accumulated interest and penalties would result in a taxpayer being unable to afford life necessities (food, shelter, transportation, medical help, etc.) then the CRA may consider waiving or reducing the penalties and interest. However, this will only be considered if the penalties and interest represent a significant portion of the amount owing, and if extreme financial difficulty on the part of the taxpayer exists.
- Extraordinary circumstances
- A request for taxpayer relief may be accepted if circumstances beyond a taxpayer’s control have caused delays that have led to penalties and interest being charged. This may include natural or human-made disasters, serious illness or accident, civil disturbances, postal strikes, or significant emotional or mental distress.
- Other circumstances
- The CRA may accept a request for taxpayer relief in circumstances other than the ones listed here.
How to File a Request for Taxpayer Relief
If you wish to file a request for taxpayer relief, you need to fit into one of the situations listed above. In addition, you will need to provide proof of your situation. The better you are able to prove your case and explain your situation, the greater the likelihood of your request for taxpayer relief being accepted.
Working with a trusted and experienced tax professional can increase your odds of success. The team at Farber Tax Solutions is made up of accounting, legal, and ex-CRA professionals who understand CRA processes, have a successful history of communicating and negotiating with the CRA, and who know what it takes to resolve tax situations. Contact us today to find out more.
Farber Tax Solutions can help you successfully deal with CRA problems. We utilize the experience of our tax experts to:
- 1| Offer a comprehensive solution that is focused on achieving the most favourable possible outcome for your tax issue;
- 2| Communicate with the CRA on your behalf and navigate the entire CRA dispute process; and
- 3| Offer a complete solution to your tax problems, including ex-CRA professionals and tax lawyers from Farber Tax Law.
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