The Canada Revenue Agency has, over the last few years in particular, received a less than stellar reputation for apathy and indifference when it comes to those taxpayers unable to meet tax obligations in a variety of circumstances. While it is true that the CRA won’t negotiate to reduce an overall tax debt, the Income Tax Act does give Canadians the ability to appeal for relief under the CRA Taxpayer Relief Program.
Under the Taxpayer Relief Program, the CRA has the ability to use their discretion when it comes to taxpayers’ misfortune or circumstance. That being said, just falling behind or not wanting to pay are not considered viable reasons. In order to qualify, your inability to meet your tax responsibilities needs to fall into one of the following categories:
- Extraordinary circumstances. A death in the family, a divorce, drug or alcohol issues, serious illness, serious emotional/mental distress and certain other personal circumstances could be accepted as extraordinary circumstances by the CRA.
- Errors or delays on behalf of the CRA. This can include delays in processing, incorrect information being provided, or errors in processing, all of which can lead to interest adding up.
- Extreme financial hardship. If your repayment obligations, made more difficult by interest and penalties, make it impossible for you to afford the basic necessities of life, the CRA may choose to reduce or eliminate penalties/interest.
- Natural or man-made disasters. If a natural (hurricane) or man-made (postal strike) disaster made it impossible/unsafe for you to file your returns on time, this may be cause for relief of penalties and interest.
Under these circumstances, the CRA can use its discretion to determine what relief is warranted. It is important to remember that just because you submit an application does not mean you automatically qualify or will be accepted for relief. This is why it is best to provide as much supporting documentation as possible to increase your chances of success with CRA taxpayer relief.
As mentioned, if the CRA has assessed you for a tax debt, it will not get rid of or reduce that debt. However, significant money can be saved with the reduction of interest and penalties, and that is what makes CRA taxpayer relief so important.
If you believe your circumstance warrants relief, call Tax Solutions Canada today. We can walk you through the process to help ensure your greatest chances of success: 1 888-868-1400.