There are relief measures in place for taxpayers unable to comply with a particular income tax filing requirement. Under the Canada Revenue Agency’s (CRA) guidelines for Taxpayer Relief, the CRA may grant relief from penalties and interest where the following types of situations exist and led to your inability to satisfy the tax obligations or requirements:
- Extraordinary circumstances such natural or man-made “disasters”, civil “disturbances”, or “disruptions” in services such as postal services. An example of this was the Quebec ice storm or the flooding of the Red River in Manitoba. There are also examples of smaller or more contained “disasters”, “disturbances”, and disruptions” for which the CRA granted relief.
- Extraordinary circumstances may also include personal situations such as serious illness, injury from an accident, a death in the immediate family member, etc.
- Sometimes actions of the CRA itself may cause the CRA to grant relief such as last year when it erroneously advised taxpayers the personal tax filing deadline had been extended.
- Civil disturbances or disruptions in services, such as a postal strike
- You many even get relief from interest or penalties because of your inability to pay or financial hardship.
The Canada Revenue Agency will consider factors such as:
- Whether you have a history of compliance with tax obligations (i.e., whether you have filed tax returns on time in the past);
- Whether you have exercised a reasonable amount of care and have not been negligent or careless; and
- Whether you acted quickly to remedy the delay or omission.
Your request for taxpayer relief has to be made within 10 years. For example, a request for taxpayer relief filed during the 2016 year can only deal with an issue related to 2006 or later years.
While powerful, the Taxpayer Relief measures are inherently subjective, requiring the CRA to exercise judgement. Policies and guidelines followed by the CRA may change from time to time. If you believe you have a basis for making a claim under Taxpayer Relief, contact a Chartered Professional Accountant for assistance.