Taxpayer Relief Provisions

The taxpayer-relief provisions, found in subsection 220(3.1) of the Income Tax Act, give the Canada Revenue Agency discretion to cancel or waive penalties and interest — though not the underlying tax. Relief is typically considered where a balance arose from extraordinary circumstances beyond the taxpayer's control (such as serious illness, a death in the family, or a natural disaster), from actions or delays of the CRA itself, or from financial hardship that makes paying the interest unduly difficult. A request is made on Form RC4288 and supported by documentation of the circumstances. An important limit is the ten-year window: the CRA can grant relief only for the ten calendar years preceding the year in which the request is made. The provisions were historically known as the "fairness provisions." They are a principal tool for reducing penalties and interest where the Voluntary Disclosure Program does not apply.