Guides · Written by a Canadian CPA · Not legal or tax advice
Taxpayer relief: how it works
Penalties and interest are not always final. When circumstances beyond your control prevented you from meeting a tax obligation, the CRA has discretion to cancel or waive them. Here is how that discretion works, who exercises it, and where its limits are.
What taxpayer relief is
Under the taxpayer relief provisions, the Minister of National Revenue may cancel or waive all or part of any penalty or interest a taxpayer owes (ITA s.220(3.1); for GST/HST, ETA s.281.1). A waiver covers penalties and interest that have not been assessed or charged yet; a cancellation covers amounts already assessed or charged. Relief reaches penalties and interest only — a relief request does not reduce the underlying tax. If the tax itself was assessed incorrectly, that is a dispute about the assessment, and a different process applies: see RC4288 vs. a notice of objection.
The circumstances the CRA considers
The CRA may grant relief where a situation justifies a taxpayer’s inability to satisfy a tax obligation or requirement. The CRA’s guidelines (Information Circular IC07-1R1) group the situations this way:
- Extraordinary circumstances — events beyond your control, such as a natural or human-made disaster (a flood or fire), a civil disturbance or disruption in services (a postal strike), a serious illness or accident, or serious emotional or mental distress, such as a death in the immediate family.
- Actions of the CRA — the penalties or interest resulted mainly from something the CRA did: processing delays that left you uninformed that an amount was owing, errors in material available to the public, incorrect information given to you, errors in processing, delays in providing information, or undue delays in resolving an objection or an appeal or in completing an audit.
- Inability to pay or financial hardship — a confirmed inability to pay, for example where collection has been suspended, where an extended payment arrangement is in place, or where paying the accumulated interest would cause a prolonged inability to provide basic necessities such as food, medical care, transportation or accommodation. Note that cancelling a penalty on hardship grounds alone is not generally considered, unless an extraordinary circumstance prevented compliance.
- Other circumstances — the guidelines are not exhaustive and are not binding in law. A CRA delegate may grant relief even where your circumstances do not fall within the situations above.
Relief is discretionary
The Minister does not have to grant relief. Each request is reviewed and decided on its own merit, and if relief is denied or partly granted, the CRA will explain the reasons for the decision. In deciding, the CRA considers whether you have a history of compliance with your tax obligations, whether you knowingly allowed a balance to exist on which arrears interest accrued, whether you exercised a reasonable amount of care and were not negligent or careless in conducting your affairs, and whether you acted quickly to remedy any delay or omission.
Who decides
Relief decisions are made by CRA officials to whom the Minister’s authority has been delegated. In general practice, another CRA official reviews your request and prepares a decision report, including a recommendation, for the delegated official’s consideration. The delegated official makes the final decision and is responsible for notifying you of it in writing.
How to apply
You apply with Form RC4288, or with a letter that covers the same ground — the form is not mandatory. There is no CRA fee for making the request. You can send it online through the “Request relief of penalties and interest” service in My Account, My Business Account or Represent a Client, send the completed form through the “Submit documents” service in those accounts, or mail it to the designated CRA office shown on the form. While your request is being reviewed, interest continues to accrue on any amount owing; paying the amount owing in full is how you stop further interest from accruing, and if relief is later granted on amounts you already paid, the CRA will pay refund interest on them.
The 10-year limit
Relief is subject to a 10-year limitation period — and it runs on two different clocks, one for penalties and one for interest. Past the limit, the Minister has no authority to grant relief at all. The rules, with worked examples, are in the taxpayer relief 10-year limit, explained.
If the CRA refuses
There is no right of objection or appeal for a relief decision. If you believe the Minister’s discretion was not properly exercised, you can ask the CRA for a second administrative review — an independent review by officials who were not involved in the first review, where you can make additional representations and add new information. You can also apply to the Federal Court for judicial review, within 30 days of the date you received notification of the decision; the CRA’s general policy is that you ask for the second administrative review first and wait for its decision. The Court cannot substitute its own decision — it can only refer the decision back to the Minister for reconsideration by another delegated official.
Relief is not an objection — and it does not stop the objection clock
A relief request does not replace an objection, and the objection deadline keeps running while relief is considered. If an assessment is under objection or appeal, the CRA may tell you informally what it intends to decide on certain relief grounds, but a formal written relief decision is not issued until the objection or appeal is resolved or all rights of appeal have expired — and requests based on inability to pay or financial hardship are generally put on hold until then. If your situation involves both a wrong assessment and penalties or interest you want cancelled, keep the two processes distinct and protect the objection deadline first.
Common questions
Can taxpayer relief cancel the tax I owe?
No. Relief under the taxpayer relief provisions cancels or waives penalties and interest only — it does not reduce the underlying tax. If you say the tax itself was assessed incorrectly, that is a dispute about the assessment, which is what a notice of objection is for.
Is there a fee to request taxpayer relief?
No. The CRA does not charge a fee to make a relief request. You can file Form RC4288 or send a letter, online through your CRA account or by mail to the designated office shown on the form.
Does a relief request pause my objection deadline?
No. A relief request does not replace an objection and does not stop the objection deadline from running. If you disagree with an assessment, protect the objection deadline separately. A formal relief decision on an assessment under objection or appeal is not issued until that process has ended.
Who decides a taxpayer relief request?
A delegated CRA official decides whether to grant, partly grant, or deny the request. Another CRA official typically reviews the request first and prepares a decision report with a recommendation. The delegated official makes the final decision and notifies you of it in writing.
What if the CRA refuses my relief request?
There is no objection or appeal route for a relief decision. You can ask the CRA for a second administrative review, done by officials who were not involved in the first review. You can also apply to the Federal Court for judicial review, within 30 days of the date you received the decision.
Check the official sources
Reviewed October 18, 2026. General information only; check the current instructions and your notice before filing.