The Taxpayer Relief Program is an platform which can help to eliminate or at least reduce the penalties or the interests due on Income Tax. However, there are certain circumstances under which the Canada Revenue Agency (CRA) reduces or waives off the penalties or interests levied on Income Tax. Although this is a tough and rare phenomenon, but it certainly is possible if the applicant meets all the required conditions put forth by the agency. Only on complying with these conditions would it be possible to waive off or reduce penalties or interests on tax.
The first and foremost step that the applicant needs to take is to prove that the reasons that forced him or her to be unable to pay tax are beyond control. The unavoidable situations have to match with any of the following :
Errors made by the Canada Revenue Agency on their part – In case if the CRA has taken a lot of time to conduct tax audits, then, the applicant can request for the interest amounts to be waived off; or in case if CRA provides wrong information pertaining to any law then the applicant might ask for a reduction or complete elimination of interests and fines.
Disasters, either natural or man-made, prevented the filing of the tax and payment – There could be a situation where one has filed for tax deductions but due to natural calamities or postal strike, the payment has not reached, in such cases CRA might verify real time situations and grant tax relief.
Financial adversity that is grave in nature – In order to get tax relief on grounds of extreme financial adversities, one has to prove that paying of income tax might lead to the individual not being able to meet the dire basic necessities of life such as food, shelter, electricity and so on. However, this would require serious proofs of the monetary hardships faced. It is required for the applicant to be declared as ‘borderline insolvent’ to ask for tax relief on the grounds of financial adversities.
Some extraordinary conditions – Few other situations like death of a family member, divorce, serious illness, issues related to affinity towards drug and alcohol and its rehabilitation, accident, emotional breakdown due to stress or depression and some other personal sufferings could reduce or waive off fines and interests towards Income Tax.
However, the most important aspect is that the CRA has to be provided with ample proofs in order to establish the authenticity of the reasons for not being able to pay taxes, interests or fines.
How to apply ?
In order to get a tax relief such as reduction or waiving off of interests and penalties, the taxpayer or any of his or her authorized representative has to fill out the form RC4288 and submit the same at the local nearby tax services office. The form is available in various formats such as Braille, E-text, audio and in large fonts.
There is a time limit of 10 years on all the above mentioned provisions of taxpayers relief. For instance, if an individual wants to apply for tax relief for the year 2006, then, the request for elimination or reduction of tax interests and fines need to be submitted to the CRA by December 31, 2016. This is applicable to all GST/HST registrants.
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