Taxpayer Relief Letters

April 10, 2012 11:33 ET

Got Tax Debt? The Taxpayer Relief Provisions of Canada's Income Tax Act Could Help

PETERBOROUGH, ONTARIO--(Marketwire - April 10, 2012) -

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The Taxpayer Relief Provisions of the Income Tax Act might be the best help available to Canadians with tax debts. This legislation allows Canadians to apply for penalty and interest relief on outstanding tax amounts. For taxpayers with longstanding liabilities or high dollar balances, a successful application could mean huge savings.

Individual and business taxpayers can request Canada Revenue Agency reduce or eliminate penalty and arrears interest, or stop the interest clock from ticking by waiving currently accruing interest. Applications can be made under three categories- Financial Hardship, Actions of the C.R.A., and/or Extraordinary Circumstances. Relief applications may be made by completing an RC4288 form, available on the Agency website, or by making the request in a letter.

Former C.R.A. Collections Officer Frank Flynn, now operating Taxpayer Relief Letters, a niche consultancy specializing in C.R.A. collection matters and writing Taxpayer Relief requests says, "Before making an application, taxpayers should investigate whether their situation fits with the legislation." Taxpayers are given three opportunities to make their case. If unsuccessful with a first level request through their Regional Intake Unit, taxpayers may make a request for a second level review by the Director of their local Tax Office. If after a second level review they are unsatisfied, taxpayers may request a Judicial Review.

Mr. Flynn has advice for taxpayers who want to maximize their chances for Relief; "When making a Relief application, observe the Golden Rule for all communications with the Agency: If you don't know what to say, don't say anything. The Agency uses very specific decision-making criteria to determine who will be granted relief. If you're unfamiliar with the legislation, do some on-line research or ask your tax-preparer for guidance before applying."

Mr. Flynn points out that while it is important say the right things, it's just as important not to say the wrong things. "Too many applicants with good cases are denied, not because they haven't presented good arguments for relief, but because they've made statements that would disqualify them from being granted relief. This is why it's important to understand the parameters of the legislation or get good guidance on how to write a strong application."

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