Circumstances that may warrant acceptance of your request
The Canada Revenue Agency (CRA) may accept a request in the following situations:
- the late, amended, or revoked election must be correct in law based on the relevant legislation in place for the applicable tax year to which the election applies;
- there have been tax consequences that you did not intend and there is evidence you took reasonable steps to comply with the law;
- the request arises from circumstances beyond your control, e.g., natural or man-made disasters such as: flood or fire; civil disturbances or disruptions in services, such as a postal strike; a serious illness or accident; serious emotional or mental distress, such as death in the immediate family;
- it is evident you acted on incorrect information given by the CRA, such as an incorrect written reply to your question or an error in a CRA publication;
- the request results from what is a mechanical error, e.g., using the net book value amount when obviously you intended to use the undepreciated capital cost or using an incorrect cost;
- the later accounting of the transactions by all parties is as if the election had been made, or had been made in a particular manner;
- you can demonstrate that you were not aware of the election provisions, even though you took a reasonable amount of care to comply with the law, and took action to remedy the situation as quickly as possible.
When accepted by the CRA, a late or amended election will be considered to have been made at the time it was required to be made. For amended or revoked elections, the original election will be cancelled. To give effect to the acceptance of a late, amended, or revoked election, the CRA will reassess the affected returns for the tax years in question even if the years are beyond the normal reassessment period.
Any assessments or reassessments resulting from the CRA's acceptance of the request is subject to the general provisions concerning arrears interest charged on the balance owing.
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