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A Request for Taxpayer Relief (in Quebec, an Application for Cancellation or Waiver) is an administrative process under which the Canada Revenue Agency (the “CRA”) (or Revenu Québec, “RQ”) may exercise its discretion to cancel or waive penalties and / or interest assessed in respect of income tax, sales taxes, and certain other taxes.

Such discretion will generally be exercised only when a taxpayer is unable to meet its tax obligations due to circumstances beyond the taxpayer’s control, such as:

• Extraordinary circumstances / exceptional situations: natural or man-made disasters, strikes, serious illnesses, accidents, death in the immediate family, etc.
• Actions by the CRA or RQ: errors in public documents, incorrect information provided, processing errors, delays in communicating necessary information etc.
• Inability to pay or financial hardship: particularly when a payment would result in a prolonged inability to meet basic needs (food, shelter, medical care).

The above list is not exhaustive.

It is important to note:

• Relief is generally not granted for retroactive tax planning or in cases of negligence;
• Although there is no formal deadline to submit a request for relief, such a request can only apply to a tax year or tax period that ended within ten (10) years prior to the calendar year in which the request is filed;
• It may therefore sometimes be useful to file a “pre-emptive” request;
• Any unpaid balance will continue to accrue interest while a request is being processed;
• A written decision will ultimately be communicated, explaining the reasons for a refusal or partial acceptance;
• In the event of a refusal or partial acceptance, it may be appropriate to request an administrative review by another officer;
• If a disagreement persists, a judicial review may be appropriate but must be filed within thirty (30) days of the unfavorable decision.

A request for relief is fundamentally discretionary, and each request is evaluated on its own merits. And most importantly, note that relief may not be granted even if all applicable criteria are met.

Therefore, it is essential to thoroughly analyze and identify the relevant facts, to clearly formulate the arguments in support of a request and to carefully organize the documents to be submitted with said request.  In this respect, one of our seasoned tax litigation attorneys is available to assist you.