CRA Taxpayer Relief — Guide + Letter Templates

Legal framework

• ITA s.220(3.1): Minister may cancel or waive penalties or interest payable
• Information Circular IC07-1R1: the policy document setting out eligibility
• 10-year limitation: request must be made within 10 calendar years of the year you want relief for
• Form RC4288: Request for Taxpayer Relief

Three grounds for relief

1. Extraordinary circumstances: serious illness, accident, mental distress, death in the immediate family, civil disturbance, natural disaster
2. CRA actions: processing delays, errors in published guidance, incorrect information provided in writing, undue delays in resolving objections
3. Financial hardship / inability to pay: interest preventing resolution; payment of penalties would jeopardise basic needs or continued business operations

How to file RC4288

• Online: CRA My Account → Submit Documents → reference number from your assessment
• Mail: regional tax centre processing taxpayer relief — addresses listed at canada.ca/cra-taxpayer-relief
• Always include: Form RC4288, signed letter, supporting documentation, copy of relevant Notice of Assessment

If you're denied

1. Second administrative review: request a different officer reviews the file. Free, no deadline beyond reasonableness.
2. Federal Court judicial review: apply under s.18.1 of the Federal Courts Act within 30 days of the second-review decision. The court reviews reasonableness of process, not the underlying merits.

Five copy-paste templates

[Your Name]
  [Address]
  SIN: [Your SIN]

  Canada Revenue Agency
  Taxpayer Relief Coordinator
  [Your Tax Services Office address]

  Date: [Date]

  Re: Request for Taxpayer Relief under subsection 220(3.1) of the Income Tax Act
  Taxation Year(s): [Year]
  SIN: [Your SIN]

  To Whom It May Concern,

  I am writing to request the cancellation of late-filing penalties and arrears
  interest assessed against me for the [Year] taxation year, pursuant to
  subsection 220(3.1) of the Income Tax Act and the criteria set out in
  Information Circular IC07-1R1.

  Grounds: extraordinary circumstances beyond my control (illness).

  Facts:
  From [start date] to [end date], I was [diagnosis / hospitalised / under
  active treatment for serious illness]. During this period I was unable to
  attend to my financial and tax affairs. My ability to gather records, work
  with an accountant, and file by the deadline was directly impaired.

  Supporting documentation enclosed:
  - Letter from [physician name, clinic] dated [date]
  - Hospital discharge summary dated [date]
  - [Any prescription or treatment records relevant to the dates above]

  Compliance history:
  I have filed on time for the [N] years prior to this incident and have no
  outstanding returns. The [Year] late filing is an isolated incident
  directly attributable to the medical circumstances above.

  Steps taken to ensure future compliance:
  - Engaged [accountant name] effective [date]
  - Set up pre-authorized debit for instalments
  - Calendar reminders for all filing deadlines

  Relief requested:
  Cancellation of the late-filing penalty of $[amount] and arrears interest
  of $[amount] assessed on my [Year] T1 return.

  I am available at [phone] or [email] for any further information.

  Sincerely,

  [Signature]
  [Printed Name]

[Your Name]
  [Address]
  SIN: [Your SIN]

  Canada Revenue Agency
  Taxpayer Relief Coordinator
  [Your Tax Services Office address]

  Date: [Date]

  Re: Request for Cancellation of Instalment Interest under s.220(3.1)
  Taxation Year: [Year]
  SIN: [Your SIN]

  To Whom It May Concern,

  I am requesting cancellation of instalment interest of $[amount] charged on
  my [Year] T1 assessment, on the basis that I followed the instalment
  amounts and due dates provided in the CRA's own reminder notices.

  Facts:
  The CRA issued me Instalment Reminder Notice INNS1 dated [date] and INNS2
  dated [date] for the [Year] taxation year. The notices specified instalment
  amounts of:
  - March 15, [Year]:     $[amount]   — paid [date], confirmation [#]
  - June 15, [Year]:      $[amount]   — paid [date], confirmation [#]
  - September 15, [Year]: $[amount]   — paid [date], confirmation [#]
  - December 15, [Year]:  $[amount]   — paid [date], confirmation [#]

  I paid each instalment in full and on time as instructed.

  CRA's published guidance confirms that taxpayers who pay the reminder
  amounts on time are not charged instalment interest, even if those amounts
  prove insufficient. This is the no-calculation safe harbour described in
  the CRA's Paying Your Income Tax by Instalments guide (T7B-CORP and the
  individual equivalent).

  Relief requested:
  Cancellation of the instalment interest of $[amount] in full.

  Supporting documentation enclosed:
  - Copies of INNS1 and INNS2 notices
  - Bank or CRA confirmation of each instalment payment

  Sincerely,

  [Signature]
  [Printed Name]

[Your Name]
  [Address]
  SIN: [Your SIN]

  Canada Revenue Agency
  Taxpayer Relief Coordinator
  [Your Tax Services Office address]

  Date: [Date]

  Re: Request for Penalty Relief under subsection 220(3.1) of the Income Tax Act
  Taxation Year: [Year]
  SIN: [Your SIN]

  To Whom It May Concern,

  I respectfully request cancellation of the late-filing penalty of $[amount]
  assessed against my [Year] T1 return, on the basis that this is an
  isolated incident in an otherwise unbroken record of timely compliance.

  Compliance history:
  I have filed every prior T1 return on time and paid all balances owing on
  or before April 30 for the [N] years preceding [Year]. CRA records will
  confirm this clean filing history.

  What went wrong in [Year]:
  [Concise factual explanation — e.g. "I changed accountants in March [Year]
  and the file transfer caused a documentation gap that was not resolved
  until [date], after the filing deadline." Be specific; vague excuses fail.]

  I filed the return on [date] — [X] days late — and paid the balance owing
  in full on [date].

  Steps taken to prevent recurrence:
  - [Specific corrective measure, e.g. moved to a single accounting firm,
  scheduled prior-year T1 work to begin in February]
  - Calendar reminders set for all future filing deadlines
  - Pre-authorized debit established for any instalment obligations

  Relief requested:
  Cancellation of the late-filing penalty of $[amount].

  I am available at [phone] or [email] for any clarification.

  Sincerely,

  [Signature]
  [Printed Name]

[Your Name]
  [Address]
  SIN: [Your SIN]

  Canada Revenue Agency
  Taxpayer Relief Coordinator
  [Your Tax Services Office address]

  Date: [Date]

  Re: Request for Interest Relief — Financial Hardship under s.220(3.1)
  Taxation Year(s): [Years]
  SIN: [Your SIN]
  Outstanding balance: $[principal] principal + $[interest] accrued interest

  To Whom It May Concern,

  I am requesting cancellation of accrued arrears interest of $[interest] on
  my outstanding tax balance, on the basis of demonstrated financial
  hardship as described in Information Circular IC07-1R1.

  Facts:
  Since [date], my financial circumstances have changed materially:
  - [Income source] ended on [date] — annual income reduced from $[before]
  to $[after]
  - [Any other material change: job loss, illness, business closure,
  divorce, dependent care]

  Current financial position:
  - Gross monthly income: $[amount]
  - Essential monthly expenses: $[amount]
  - Available cash: $[amount]
  - Other debts: $[amount]

  I have engaged with CRA Collections and entered into a payment arrangement
  on [date], paying $[amount] per month against the principal. At the
  current interest rate of [%], the accrued interest is growing faster than
  my payments can reduce the principal, which makes resolution mathematically
  impossible without relief.

  Relief requested:
  Cancellation of arrears interest of $[interest] in full, allowing my
  monthly payments to apply against principal until the balance is cleared.

  Supporting documentation enclosed:
  - Most recent Notice of Assessment
  - Bank statements for the last [3] months
  - Pay stubs / record of employment / proof of income reduction
  - Monthly budget worksheet

  I am committed to clearing this debt and remaining current going forward.

  Sincerely,

  [Signature]
  [Printed Name]

[Your Name]
  [Address]
  SIN: [Your SIN]
  Corporation BN (if applicable): [BN]

  Canada Revenue Agency
  Taxpayer Relief Coordinator
  [Your Tax Services Office address]

  Date: [Date]

  Re: Late-filed election under subsection 220(3.2) of the Income Tax Act
  Election: subsection [85(1) / 45(2) / 86(1) / other]
  Taxation Year: [Year]
  SIN: [Your SIN]

  To Whom It May Concern,

  I am submitting a late-filed election under subsection [section number] for
  the [Year] taxation year, together with the prescribed late-filing penalty
  under subsection 220(3.5).

  Election details:
  - Type of election: [s.85(1) rollover / s.45(2) change-in-use / other]
  - Effective date of transaction: [date]
  - Property described: [description]
  - Original filing deadline: [date]
  - Date of this late filing: [date]
  - Days late: [N]

  Reason for late filing:
  [Concise factual explanation. CRA exercises discretion under s.220(3.2)
  based on whether the taxpayer made the election in good faith and whether
  acceptance would not prejudice the administration of the Act.]

  It is just and equitable to accept this late election because:
  - The election reflects the genuine intention of the parties at the time
  of the underlying transaction
  - All parties to the transaction agree to and have signed the election
  - Accepting the late election will not result in a tax benefit beyond
  what was originally available
  - No tax avoidance motive is present

  Prescribed late-filing penalty:
  Calculated under s.220(3.5) at the lesser of (i) 1/4 of 1% of consideration
  per month, and (ii) $100/month, capped at $8,000.

  Months late:         [N]
  Penalty calculated:  $[amount]
  Payment enclosed:    $[amount] (cheque/EFT reference [#])

  Documents enclosed:
  - Completed election form(s): [T2057 / T2059 / etc.]
  - Supporting agreements and resolutions
  - Payment for prescribed penalty

  I am available at [phone] or [email] for any further information.

  Sincerely,

  [Signature]
  [Printed Name]

Related guides

• CRA Audit Guide
• Instalments Guide
• Downloads — More CRA Templates