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, penalties, or other debt paid or payable under legislation administered by the Canada Revenue Agency (CRA).

There are many ways you can address your debt with the CRA. Remission is an avenue of last resort and may be considered where relief is warranted but can't be achieved under applicable tax laws, through an assessment, or through other actions.

All remission orders are published in Part II of the Canada Gazette. A remission order includes the taxpayer's name, the amount remitted, the tax years or reporting periods, and a brief explanation of the basis for remission.

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. For more details, see How we review your request.

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
• the importance of fairness to other Canadians

Situations not likely to be considered for review

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

• you do not provide adequate supporting documents with your request that allow us to verify your circumstances
• the circumstances affect the population as a whole, for example a downturn in the economy
• the circumstances are temporary in nature (for example, you currently have limited income because you are taking time off work for a specific life event)
• 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 made 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, such as situations where you claimed excessive business losses or charitable donations
• the remission request is an attempt to revisit an audit, objection, consent to judgment, minutes of settlement, or a court decision because you were dissatisfied with the results
• you didn't file an adjustment request for your tax return, file an election, file a notice of objection, or further appeal a matter to court within the time limits, and you're trying to use remission to extend those time limits
  • Generally, you’re not expected to appeal the matter to court if you’re not disputing the correctness of an assessment and are asking for a remission review for other reasons (for example, you experienced a financial setback with an extenuating factor or believe the administration of the tax legislation has led to an unfair outcome)
• you’re trying to use remission for retroactive tax planning purposes, because you later realized that there was a more beneficial alternative
• granting remission would compromise the integrity of the tax or benefit administration

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

Who can request a remission review

Any taxpayer can request a remission review, including:

• an individual
• a corporation
• a small business
• a sole proprietor
• an employer or payer
• a partnership
• a trust
• an estate
• an organization (for example, a registered charity or a public service body such as a hospital authority)

You may request a remission review if you’ve paid or owe an assessed federal amount such as:

• federal income tax
• goods and services tax (GST)/ harmonized sales tax (HST)
• excise tax or excise duty
• interest
• penalty
• other debt (for example, debts related to Canada Pension Plan contributions, employment insurance premiums, or child and family benefit overpayments)

Situations that may be considered for review

We have developed guidelines that set out characteristics common in cases where remission has been granted. The guidelines help us in reviewing remission requests.

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

• Extreme financial hardship

  For the purposes of remission, a taxpayer is considered to be in extreme financial hardship if their current and anticipated resources aren’t enough to pay amount(s) owing and still afford the basic necessities of life such as:

  • healthy and nutritious food
  • safe and suitable shelter
  • clothing
  • transportation
  • medical expenses not covered by insurance
  • basic Internet / cell phone service
  • utility costs
  • childcare
  • education

  Remission is generally only recommended under this guideline if you can show that after considering available resources (for example, existing funds or assets, rearranging finances, or the possibility of borrowing funds), you cannot meet your tax obligations while still affording the basic necessities of life.

  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:

  • your current ability to pay, including the impact paying the amount owing would have on you
  • your disposable income, which might include examining whether your current expenses are modest, economical, and reasonable
  • your age, health, available resources, and income levels
  • your annual family income since the amount(s) owing arose compared to the low income threshold for your household size, according to Statistics Canada’s low income measure (LIM).
    • Your annual family income includes the total income earned by you and your spouse or common-law partner, as well as any other individuals related by blood, marriage, common-law partnership or adoption that live at your residence
    • Find out more about Statistics Canada’s low income measure thresholds for each household size
  • your ability to pay the amount(s) in the future (for example, your future earning potential).

  To help you make your request, the CRA has developed Form RC921, Remission Financial Disclosure Form for Individuals, which you may complete as part of your request. If you prefer, you may instead provide us with a statement of income and expenses, assets and liabilities in an alternate format of your choosing (for example, a letter).

  Concept of extreme financial hardship rarely applies to corporations and trusts

  • Corporations are not likely 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 not likely 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 both of the following conditions apply:

  • payment of the amount(s) would strain your limited finances
  • there is an extenuating factor affecting you, beyond your control, and clearly relating to the amount(s) requested

  An extenuating factor affects 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 causing physical or mental limitations that made you not able to manage your affairs. In such a case, you'll need to submit medical reports certified by a medical doctor and an explanation of how the illness caused you to incur the amount(s), along with proof of your financial circumstances.

• Mistake made by the CRA

  Wrong actions taken, or wrong information provided, by a CRA officer 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 have been under the legislation. In cases where such an error can be confirmed, we’ll also consider whether:

  • any information given was wrong at that time and you acted on the basis of that information
  • the error would have been recognized as an error at the time of the assessment and not based on later events
  • actions taken, or information provided, by CRA officers may have misled or discouraged you from taking timely or appropriate action
  • you had reason to believe that the CRA officers acted in an authorized capacity
  • there is verifiable evidence that CRA officers acted incorrectly or gave you wrong 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 could have filed a waiver or notice of objection or sent new information within the required time limit 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 officers to properly investigate the matter
• Unintended results of 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 not fair 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.

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