Canada Revenue Agency (CRA) Offers Advice for Settling Tax Dispute Claims, Part 3

August 11th, 2014 by

By Ivan Merrow, Summer Law Student

This article is part three of a three-part series on the Canadian Tax Foundation (“CTF”)’s event titled “Tax Dispute Resolution: an Inside Look from the Government’s Perspective.” (Click here for part 1 or part 2.)

The event featured two main speakers: Marie-Thérèse Boris, formerly Senior Counsel for the Department of Justice and Anne-Marie Lésvesque, Assistant Commissioner of Appeals for the Canada Revenue Agency (“CRA”).

The Devry Smith Frank LLP (“DSF”) tax litigation team attended the event to better assist its corporate and personal clients to resolve their disputes with the CRA.

CRA will not consider applications for interest relief while appeals or objections are ongoing

Ms. Lésvesque ended her presentation by confirming that the CRA will not consider applications for interest relief while the appeal or objection process is ongoing. This means it is important to work with a tax lawyer to address the potential outcomes of your tax dispute and what it means in the event of interest or penalties payable.

Speaking for the CRA, Ms. Lésvesque shared that they are piloting an “early determination” program that may identify files for potential interest or penalty relief. For example, the CRA might identify specific periods of time where interest relief could be granted instead of across the entire timeline. It was unclear when this program might be implemented on a wider scale.

Obtaining interest relief from the CRA

Good reasons to grant interest relief, in Ms. Lésvesque’s opinion, include:

(1) The CRA made an error that created a delay;

(2) The CRA delayed a resolution without informing the taxpayer that interest is accruing;

(3) There were exceptional circumstances like a flood or disaster;

(4) The taxpayer has financial hardship, proven by his or her assets and income potential (Ms. Lésvesque was quick to point out that financial hardship does not count as grounds for tax relief, only interest relief), and

(5) Remission of taxes by application to cabinet. Ms. Lésvesque made it clear that these are very rare. Although the CRA can recommend them, they are quite exceptional.

For more information, you can also consult the CRA’s Taxpayer Relief Provisions, or contact a tax lawyer.

As always, for any tax law related matters in Toronto, Ontario Canada, contact Devry Smith Frank LLP at 1-416-446-1400 or Eldad Gerb at 1-416-446-3327.

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