Taxpayer relief provisions

Businesses meet this when an old filing error or a missed election turns up during a sale or a buyer’s review. Subsection 220(3.1) lets the Minister waive or cancel all or any portion of a penalty or interest otherwise payable under the Act, on or before the day ten calendar years after the end of a taxation year. Subsection 220(3.2) lets the Minister extend the time for making an election, or permit one to be amended or revoked, only for an election under a prescribed provision and on an application made within the period that subsection sets.

What the CRA says

The CRA’s circular IC07-1 describes the aim as helping taxpayers who, through personal misfortune or circumstances beyond their control, could not comply with a requirement. Its examples of extraordinary circumstances include natural or human-made disasters such as flood or fire. Relief is discretionary, so a request does not guarantee a waiver.

What to prepare

• The taxation year or years and the exact penalty, interest or election involved.
• The reason compliance was not possible, with dates and supporting documents.
• Whether the election is listed in section 600 of the Income Tax Regulations, which IC07-1 says limits late or amended election requests. A late section 85 elected amount is not on its list; section 85 has its own late-filing rules.