Interest & Penalties on Back Taxes
Where taxpayers are indebted to the CRA by owing back-taxes, the CRA will tack on interest on the overdue amounts at the rate of 6% per annum, compounded daily. The exact rate of interest can change quarterly and the CRA maintains an updated list, which can be found at the following CRA webpage: http://www.cra-arc.gc.ca/tx/fq/ntrst_rts/menu-eng.html .
In some circumstances, the CRA will also levy penalties against the taxpayer in relation to the tax debt owed. This quite rapidly causes tax debt to balloon to insurmountable proportions.
There are means to reduce or eliminate the penalties and interest that have been levied, enabling the taxpayer to pay the principal balance only. This can be achieved through a Taxpayer Relief Application.
In order to qualify for the taxpayer relief program, however, one must demonstrate that there are extenuating circumstances that have hampered his ability to pay. The CRA will allow your application only if you meet one of the three categories of factors:
- CRA in action or inaction;
- Financial inability to pay the CRA debt;
- Extraordinary circumstances such as a fire, flood, illness or death in the family.
Why you Need a Tax Debt Relief Lawyer
Our tax debt relief lawyers understand which criteria need to be satisfied for your taxpayer relief application to be accepted by the CRA.
If you have been charged tax penalties & interest in addition to your principal tax debt, contact our tax debt relief lawyers today. We will discuss your personal circumstances and determine whether you qualify for a reduction of your tax penalties & interest. If you do, we will prepare a robust application to reduce the tax penalty and interest portion of your debt significantly.
Been levied tax penalties & interest? We’re here to help™.