Giving Guidance About The CRA Taxpayer Relief Program

When an income tax return is filed late and the CRA assesses what is owed, or a previously filed return is re-assessed and new monies are owed, the CRA will add interest and penalties to the amount of the tax debt that an individual owes, which may substantially increase the amount of that debt. In this situation, Taxpayer relief is an important option that may help those clients who find themselves with tax debt.

Taxpayer relief is a formal program offered by the Canada Revenue Agency where they agree to cancel all or part of the interest and penalties. Individuals can qualify for one of the following reasons:

  1. A natural disaster, for example, misstated expenses resulting in an inaccurate return filing because a basement flooded and all receipts were destroyed.
  2. Extreme financial hardship
  3. A documented personal issue like a medical problem or death in the family
  4. An error on the part of the CRA

The Taxpayer relief program is a long and complicated process and very few applications under this program are granted. Furthermore, the CRA will not reduce the principal tax debt owed. However, it is an important option that can reduce interest and penalties.

Prior to making an application, it is important to determine whether or not the initial debt is payable, and if not, your client may need some advice on where to turn in order to reduce the debt and to make it more manageable, regardless of whether or not they receive interest and penalty relief under the program.

For more information about the Taxpayer relief program in Canada and how your clients may benefit from it, please contact me by emailing, call me at 416-907-2582 ext 2587 or visit

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Karen Goldenberg is the Director of Community Outreach at DebtCare.