Quote:
Originally Posted by calf
A relative (who I do the taxes for) received a notice of re-assessment for their 2022 taxes.
An honest mistake - there was a T5 missing, so there is an amount owed. On looking at things, we realized that this T5 was also missing in 2023 and 2024. Was about to re-file for those years, but of course the notices of re-assessment for those years have come in basically a week later, and the penalties and interest have piled up before we had a chance to correct and pay the amount owed.
Basically, they didn't have the T5 before 2022, and the new slip was in their online banking (the bank defaulted to electronic, so and they and I didn't realize it was there when we were doing the annual taxes). Lesson learned.
My question - the oversight was an honest mistake, and we didn't have a chance to realize the error and make necessary corrections - we were in the process of doing so when the other reassessments and penalties were applied. Is there any chance of success if we phone CRA to appeal the penalties? Or would it be a waste of time and we should just pay and be done (the amount is worth it to try and get forgiven with a phone call if that's possible, but not so much that it's worth hours on end of arguing and waiting on hold).
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You could attempt to do a taxpayer relief filing, but it's not guaranteed. It's just a hail Mary attempt to reduce penalties/interest. Honest mistake wise, you'd have needed to VDP before CRA figured it out. Since CRA already figured it out in your case and calculated an amount, VDP is now sealed. You're limited to CRA's mercy via taxpayer relief and CRA hasn't really been very lenient on that for a while.
The main reasons CRA might waive it would be the taxpayer is in a financial distress situation, certain illnesses and/or death of taxpayer. But it's not a guarantee the CRA would reduce or waive interest and penalties even if those criteria were met. Because it's a 3 year thing with the same type of error, CRA may waive one year but not the others. I honestly don't know. CRA has been so random in the last few years.
I'd still recommend doing the taxpayer relief application to see if you get lucky, but don't get your hopes up. The application isn't arduous, but it still takes occasional time over a period of time for waiting/communicating. Because it's not guaranteed, it may make sense to discuss whether paying the whole balance in full (taxes plus interest and penalties) prior to applying for arrears interest relief.
https://www.canada.ca/content/dam/cr...rc4288-25e.pdf