The Canadian government, through the Canadian Revenue Agency (CRA) offers Canadians taxpayer relief when natural disasters, such as the recent flooding in areas of the Toronto Islands, Quebec, the National Capital Region occur. The goal is to help reduce the burden placed on taxpayers because of natural disasters.
In a press release through the Canada Revenue Agency, the Canadian government reminded Canadians that “The CRA understands that natural disasters may cause hardship for taxpayers whose primary concern during this time are their families, homes, and communities. These individuals, businesses, and first responders may find themselves unable to file or pay taxes on time. If so, the CRA encourages them to make a request for taxpayer relief. Taxpayers can make a request for taxpayer relief online, by using Form RC4288, Request for Taxpayer Relief, or by calling the CRA at 1-800-959-8281 for individual enquiries, and at 1-800-959-5525 for business enquiries. The CRA will consider these requests on a case-by-case basis. ”
In addition, the government reminds, “Taxpayers who are unable to physically access institutions they normally depend on are encouraged to register for the CRA’s secure online services. Through My Account, individuals can register for direct deposit and avoid interruptions to tax refund or benefit payments they may be expecting.”
“Form RC4288” is used to request cancelling or waiving penalties or interest associated with filing or paying of taxes as a result of natural disaster. To be clear the government does not offer relief in the form of reduced taxes owing.
According to the CRA, “If you have a balance owing for 2016, we charge compound daily interest starting May 1, 2017, on any unpaid amounts owing for 2016. This includes any balance owing if we reassess your return. In addition, we will charge you interest on the penalties starting the day after your return is due. The rate of interest we charge can change every three months. See Prescribed interest rates. If you have amounts owing from previous years, we will continue to charge compound daily interest on those amounts. Payments you make are first applied to amounts owing from previous years.”
In addition, the CRA advises “If you owe tax for 2016 and do not file your return for 2016 on time, we will charge you a late-filing penalty. The penalty is 5% of your 2016 balance owing, plus 1% of your balance owing for each full month your return is late, to a maximum of 12 months. If we charged a late-filing penalty on your return for 2013, 2014, or 2015 your late-filing penalty for 2016 may be 10% of your 2016 balance owing, plus 2% of your 2016 balance owing for each full month your return is late, to a maximum of 20 months.”
It is best to file your taxes as early as you can, just in case of unexpected events or disasters.