tax1The CRA taxpayer relief program is a program that can reduce or eliminate penalties or interest owed on income taxes. Through the CRA taxpayer relief program, you may also be able to work out a payment plan with the Canada Revenue Agency, however this does not happen very often.

Even if you are looking to have penalties and interest reduced or waived, you are required to meet a series of conditions before the CRA will consider granting your request.

In general, you need to prove that you have been prevented from meeting your tax obligations by circumstances beyond your control. You can apply for taxpayer relief if:

  • There were errors or delays made by the CRA
  • A natural or man-made disaster made it impossible for you to file and/or pay on time
  • You are experiencing extreme financial hardship
  • Other extraordinary circumstances

Errors or Delays

If the CRA takes an especially long time to conduct a tax review or audit, for example, and interest adds up during this time, you may be able to request that the interest be waived or reduced. If the CRA provides incorrect information regarding a law, deduction or timeframe, you can also request a reduction or elimination in interest or penalties.

Natural or Man-Made Disasters

For example, if you mailed in your payment on time, but there was a postal strike and therefore it didn’t arrive on time, the CRA may grant relief. This is also true if there is an earthquake that prohibits you from safely filing or a snowstorm delays tax returns getting to the CRA.

Extreme Financial Hardship

In order to have interest or penalties waived or reduced due to your financial situation, you will need to demonstrate that paying your income taxes will prevent you from being able to afford the basic necessities of life (rent, electricity, food, etc.) In these cases, the agency may be lenient with you. In order to make this claim, you will need to show proof of financial hardship. In general, you need to be borderline insolvent in order for this reasoning to be accepted.

Other Extraordinary Circumstances

A death in the family, a divorce, drug or alcohol issues, serious illness, the loss of a main breadwinner and certain other personal circumstances could be accepted as extraordinary circumstances by the CRA and this could lead to a reduction in interest and penalties.

It’s important to note that your reasoning may or may not be accepted by the Canada Revenue Agency in any of these circumstances. Those who have valid proof and are able to show that they would have otherwise made their payments on time will have the greatest chance of having interest and penalties reduced through the CRA Taxpayer Relief Program.

If you are unable to make your payments and feel that you may qualify for this program, please contact Tax Solutions Canada today by calling 1 888-868-1400. We can help you understand if you qualify and assist you in filing the correct paperwork.

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