IC98-1R6 is the newest information circular released from the Canada Revenue Agency (the “CRA”) regarding its CRA tax collection policies. This article will identify and describe changes between the current document (IC98-1R6) and its predecessor (IC98-1R5).
An information circular is a resource document published by the CRA. These documents are not legally binding: they are simply the CRA’s interpretation of tax law. While these documents often accurately reflect the current state of tax law, at other times they may not.
Few revisions were made. In fact, the only revisions made to this year’s circular were to the previous “Taxpayer Relief Provisions” section. The changes are summarized below:
All in all, the section now reads as a program summary which focuses on a general description of the 10 calendar year limitation rule. This rule is important as relief can only be applied up to 10 calendar years before you make your request for interest and penalty relief. For example, if you file an application in 2017, relief can only be applied to penalties or interest that has accrued since 2007.
It also focuses on how the program is discretionary, meaning that the CRA is not obligated to provide relief from penalties and interest once an application is submitted; however, they may choose to do so where taxpayers are “unable to meet their tax obligations due to circumstances beyond their control.”
It is also important to note that taxpayer relief does not apply to any underlying amounts of tax. Underlying tax amounts form the basis of a tax assessment or reassessment. The onus is on the taxpayer to prove these amounts are incorrect in order to be waived or reduced. Underlying tax amounts must be challenged through either the tax notice of objection process or through an appeal to the Tax Court of Canada.
“Taxpayer relief” refers only to relief from interest and penalties that were applied to underlying amounts of tax. Perhaps confusion about the scope of the relief available under the taxpayer relief program is what motivated the title change from “Taxpayer Relief Provisions” to “Cancel or waive penalties and interest.”
Given the discretionary nature of the program, you will benefit from receiving tax legal advice before submitting your application. Our lawyers are expert Canadian tax consultants and regularly file these applications and can best present a taxpayer’s unique circumstances when applying for interest and penalty relief under the taxpayer relief provisions.
Nathaniel completed his Juris Doctor degree at Osgoode Hall Law School where he excelled in the areas of tax law and legal writing and research.He successfully completed all of the requirements of Osgoode’s Taxation Law Curricular Stream
Carson Pillar articled with us and then joined our tax law firm as an associate Canadian tax lawyer having been called to the Ontario bar in June 2016. Carson runs our Calgary tax office. Carson earned his Juris Doctor from Western University and graduated in 2015.
Ian Thomas joined our Toronto tax law firm as an articling student (student at law) in July 2016 and upon becoming a Canadian tax lawyer in June 2017 he becomes our latest tax associate. Ian earned his Juris Doctor from Osgoode Hall Law School and graduated in 2016.
Tigra Bailey has now joined our tax law firm as a summer tax law student and is expected to return as an Articling Student in 2017-2018. Tigra is completing her Juris Doctor at Queen’s University and her expected graduation date is in 2017.
Ildi has joined the law firm of Rotfleisch & Samulovitch PC in June, 2000 and brings over 25 years of legal secretarial experience to the firm. She started as a Legal Secretary and after obtaining Certificates from The Institute of Law Clerks of Ontario
Jamin Chen joins our tax law firm as an articling student in September 2016 after earning his Juris Doctor from Allard Hall at the University of British Columbia.