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 5% per annum, compounded daily.
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.
Don’t fret. There are means to reduce or altogether 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 taxpayer relief, however, one must demonstrate that there are extenuating circumstances that have hampered their 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 Lawyer
Our tax lawyers are intricately familiar with the criteria to be satisfied in order to allow your application and reduce your debt. Our tax lawyers establish that the initial debt was caused by one (or more) of these three factors.
If you have been charged penalties & interest in addition to your principal tax debt, contact us today. We will discuss your personal circumstances and determine whether you qualify for a reduction of your penalties & interest. If you do, we will prepare a robust application to reduce the penalty and interest portion of your debt significantly.
Been levied penalties & interest? We’re here to help™.