When to request a remission review

What is remission?

A remission order is a rare and extraordinary measure.

Remission provides full or partial relief from federal tax, interest, penalty, or other debt paid or payable under legislation administered by the CRA. Remission may be considered where relief is warranted but can't be achieved under applicable tax laws, through an assessment, or through other actions.

Remission is only considered in exceptional circumstances

Remission is discretionary and we will examine each request to determine if a remission review is appropriate in the circumstances. Not all requests are considered for review. If a request is considered, it's subject to an in-depth review process. See How we review your request for more details.

Very few requests result in remission being granted. Broad concerns must be considered in assessing whether it’s in the public interest to recommend the extraordinary remedy of remission, including: maintaining the integrity of the legislative appeals process, the self-assessing nature of Canada’s tax system, taxpayers’ responsibility to understand and meet their tax obligations – and importantly – fairness to other Canadians.

Situations unlikely to be considered for review

Remission generally isn't recommended if any of the following circumstances apply to the amount(s) requested for review:

• the circumstances affect the population as a whole, for example a downturn in the economy
• the appropriate recourse belongs with a third party and not the CRA:
  • you entered into an arrangement with a third party that turned out to be fraudulent
  • you engaged the services of a tax professional who makes an error or omission
  • you entered into a business arrangement with negative tax consequences or with a third party who misled you
• you were non-compliant, such as:
  • you missed deadlines as a result of a history of non-compliance with filing or remitting obligations
  • you intentionally avoided or evaded tax obligations or payment of a tax debt
  • you participated in domestic or offshore tax avoidance or evasion schemes
• the remission request is an attempt to re-visit an audit, objection, consent to judgment, Minutes of Settlement, or court decision because you were dissatisfied with the results
• you didn't request to change a tax return or a reassessment, or file an election, a Notice of Objection, or further appeal a matter to court within the time limits, and you're attempting to use remission to extend those time limits
• you are attempting to use remission for retroactive tax planning purposes because you’ve realized, subsequent to a transaction, that there was a more beneficial alternative
• granting remission would compromise the integrity of tax or benefit administration

However, even if the circumstances above are present, there may be extenuating reasons that would justify reviewing the request.

Who can request a remission review

You may request a remission review if you’re a taxpayer, including:

• an individual
• a corporation
• a small business
• a sole proprietor
• an employer or payer
• a partnership
• a trust
• an estate
• an organization, or
• a registered charity

You’ve paid or owe a federal amount which has been assessed, such as:

• federal income tax
• the goods and services tax (GST)/harmonized sales tax (HST)
• excise taxes or duties
• interest
• penalties, or
• other debt (for example, debts related to child and family benefits)

Situations that may be considered for review

We have developed guidelines which set out characteristics common in cases where remission has been granted. These guidelines assist us in reviewing remission requests.

Your request could still be considered for review even if your situation isn't listed here.

• Extreme financial hardship

  Remission is generally only recommended under this guideline if you're in such severe financial hardship that your current and anticipated resources aren't enough to pay the amount(s) owing and still enable you to afford the basic necessities of life, such as food, shelter and clothing.

  We'll generally only consider remission if you're experiencing hardship at the time you make the request. We'll also examine your ability to pay the amount(s) throughout the period under review.

  When considering the severity of hardship, we review several factors, including:

  • the impact paying the amount owing would have on you
  • your age, health, available resources, and income levels
  • your annual family income since the amount(s) owing arose compared to low income cut-offs for your region
    • your annual family income includes the total income earned by you and your spouse, as well as any other adults that live at your residence
    • Find out more about Statistics Canada’s low income cut-offs for each geographical area

  Concept of extreme financial hardship rarely applies to corporations and trusts

  Extreme financial hardship means that a person can't pay amount(s) owing and afford the basic necessities of life, such as food, shelter and clothing. Therefore:

  • corporations are unlikely to be considered for remission based on extreme financial hardship, unless it can be shown that the corporation’s financial difficulties would force it to stop operating and adversely affect a large group of people or community (such as the shut-down of the major industry in a small town with no other source of employment)
  • trusts and estates are unlikely to be considered for remission based on extreme financial hardship because the concept of affording the basic necessities of life would not apply to this type of entity
• Financial setback with an extenuating factor

  Financial setback is less severe than extreme financial hardship.

  We may consider your request for review if:

  • payment of the amount(s) would strain your limited finances, and
  • you have an extenuating factor beyond your control that clearly relates to the amount(s) requested

  An extenuating factor impacts your ability to meet your tax, filing, or payment obligations, and should generally exist from the time the amount(s) arose. An example of an extenuating factor might be a serious illness that made you incapable of meeting your tax or filing obligations. In such a case, you'll need to submit medical reports and an explanation of how the illness caused you to incur the amount(s), along with substantiation about your financial circumstances.

• Mistake made by the CRA

  Incorrect actions taken, or inaccurate information provided, by a CRA official that results in an additional amount payable may be considered for a remission review. You need evidence to support that an error caused tax, interest or penalties in excess of what your liability should’ve been under the legislation. In cases where such an error can be confirmed, we’ll also consider whether:

  • any information given was incorrect at that time and you acted on the basis of that information
  • the error would’ve been recognized as an error at the time of the assessment and not based on subsequent events
  • actions taken, or information provided, by CRA officials may have misled or discouraged you from taking timely or appropriate action
  • you had reason to believe that the CRA official was acting in an authorized capacity
  • there is verifiable evidence that CRA officials acted incorrectly or gave you incorrect information
    • in cases where there is no written evidence, we may be able to verify the facts by other credible means
  • you could have done something to avoid or minimize the tax or correct the error (within the applicable legislation)
    • for example, for GST/HST, we will consider if you could have collected or remitted the tax, or claimed a rebate
  • you couldn't have filed a waiver or Notice of Objection or sent new information within the required time limits to resolve the problem by other means
    • for example, by sending more representations during an audit or objection
  • there is evidence of bad faith on your part
  • you made your request for remission within a time period that enabled CRA officials to properly investigate the matter
• Unintended results of the legislation

  The CRA is responsible for administering tax legislation, but it doesn’t have the authority to create or amend legislation or set tax policy. If the administration of tax legislation has created tax consequences in your specific circumstances that are inequitable and contrary to the intent of the law, you may request a remission review. However, remission isn’t the appropriate avenue if you’re dissatisfied with, or are seeking to change, an existing law.

Other circumstances may also be considered.

We consider each request on its own merits, based on relevant facts and your specific circumstances.