Determining a business’ financial situation

For requests to cancel or waive interest or penalties based on an inability to pay or financial hardship, the Canada Revenue Agency (CRA) requires full financial disclosure from a business.

Note: For a business, financial hardship refers to situations when the continuity of business operations, the employees’ jobs, and the welfare of the community as a whole are jeopardized

It is the business’ responsibility to provide current documentation that supports their financial situation. Documentation could include, but is not limited to, the following:

  • a statement of earnings, including:
    • dividends;
    • gross sales;
    • interest;
    • rental income;
    • other income;
       
  • a statement of expenses, including:
    • cost of goods sold;
    • interest expense;
    • operating expenses;
    • other expenses;
       
  • a corporate balance sheet and details of assets and liabilities, including:
    • type of asset, e.g., cash, term deposit, stocks, real estate, motor vehicles, inventory, investment in other entities, real property, other receivable;
    • value or current estimated market value;
    • list of accounts receivable;
    • name of creditor;
    • amount owed;
    • terms of repayment;
    • security held;
    • details of shareholder and interrelated third party loans.

Submit the full financial disclosure information together with the written request for relief (a business may use Form RC4288, Request for Taxpayer Relief - Cancel or Waive Penalties or Interest) to the appropriate CRA designated office. Please see Submitting your request for designated office addresses.

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