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The Canada Revenue Agency (CRA) has set aside relief provisions for those who wish to have their taxes waived or cancelled. The term ‘cancellation’ implies that relief is granted for a penalty that has been calculated. The term ‘waive’ implies that relief is granted for a penalty that has not been calculated. The applicant for relief may be an individual, employer, corporation, partnership, organization, trust, estate, or goods and services tax/harmonized sales tax registrant. The CRA takes the following factors into consideration before granting relief.
This takes into account natural calamities such as earthquakes, tsunamis, landslides, floods, and fires. It also includes civil disturbances or disruptions in services such as a postal strike. Furthermore, it also addresses serious mental disability, illness, emotional duress, such as death in the family or an accident causing physical disability like paralysis.
Errors by the CRA
The CRA is also prone to make errors and penalties resulting in eligibility for relief. These errors include processing delays that fail to inform the taxpayer incorrect information in CRA material, undue delays in resolving an objection or an appeal, or in completing an audit.
The CRA might consider relief if the individual is destitute and unable to pay. Such a case exists due the loss of employment, a separation, or other hardships. The CRA must grant relief in such a case otherwise the individual will be unable make daily expenses (for medical, food, and other such expenses).
Filing for relief is a tricky business and requires a host of supporting documents. Seeing how the CRA take their sweet time to respond to an application, applicants are advised to seek professional help and get it right the first time. Tax planning for business tax returns can go a long way in avoiding penalties from the CRA.