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Although the best way to avoid paying interest and penalties is to file and pay your taxes on time, there may be instances when the interest and penalties are a result of circumstances beyond your control. Depending on those circumstances, the Canada Revenue Agency (CRA) does have the ability to cancel or waive both interest and penalties under taxpayer relief provisions. A taxpayer has 10 years to make a request for relief if they feel that their situation is within these provisions.
Although the CRA does not grant relief from interest and penalties easily, there are certain situations you may be granted relief. These include:
Note that the above is not an exhaustive list and the CRA may grant relief in other circumstances, provided they are justified.
The CRA has indicated they will also consider the following factors in determining whether to accept a taxpayer’s request:
It is important to recognize that each decision is made at the discretion of CRA and they are not required to grant relief under the taxpayer relief provisions.
Either taxpayers or their authorized representative (a third party such as an MNP Tax Specialist) should submit their requests by mail to the appropriate tax centre. This can be done in letter format, but the CRA recommends the usage of Form RC4288 – Request for Taxpayer Relief. This form provides instructions and examples of the supporting documentation you should submit with the request that support the validity of the claim The form can be found on the CRA website.
If a request has been made and denied, the CRA does allow the taxpayer the right to ask for their situation to be reviewed for a second time. In doing so, they will have the opportunity to submit additional documentation for CRA’s consideration.
If you do find yourself in one of the situations above and feel that you are within the taxpayer relief provisions, please feel free to contact your local MNP Tax Specialist for further guidance and we will be happy to help you out.
Related Topics:Canada Revenue Agency
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