The Legal Foundation For Taxpayer Rights

The Taxpayer Bill of Rights (TBR) was established by CRA in 2007 and continues to evolve under administrative policy. While not law itself, several taxpayer rights are reinforced by the Income Tax Act (ITA), Charter of Rights and Freedoms, and case law.

Key legal protections include:

• ITA section 165: Right to object to a reassessment.

• ITA section 169: Right to appeal to the Tax Court of Canada.

• ITA section 220(3.1): Right to request relief from penalties and interest.

• ITA section 241: Right to confidentiality and privacy.

• Taxpayer Bill of Rights #5: Right to be treated professionally, courteously, and fairly.

Case reference: Cannon v. Canada (2011 TCC 336) reaffirmed that CRA must act in good faith and within statutory limits when assessing or collecting taxes.

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CRA Fairness Provisions Explained

CRA’s Fairness Provisions, also known as Taxpayer Relief Provisions, allow taxpayers to request reductions or cancellations of interest, penalties, and even late-filing fines.

Section 220(3.1) – Relief Authority

CRA may grant relief if:

• Extraordinary circumstances prevented filing (illness, death, disaster).

• CRA errors or delays caused penalties.

• Financial hardship makes payment impossible without undue burden.

Requests must be submitted on Form RC4288 and supported by evidence such as medical records, correspondence, or financial statements.

Section 241 – Privacy And Data Protection

CRA cannot disclose personal or corporate tax data to third parties without consent or legal authorization. Taxpayers have the right to request full audit notes and internal communications under the Access to Information Act.

Section 152(4.2) – Retroactive Adjustment

If CRA errors are discovered, taxpayers can request corrections for up to 10 prior years under this provision.

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Your Rights During A CRA Audit Or Dispute

• The right to representation — You can authorize a CPA or lawyer to speak to CRA on your behalf.

• The right to clear explanations — CRA must provide written reasons for assessments or penalties.

• The right to appeal — You have 90 days to file a Notice of Objection under section 165(1).

• The right to fair collection — CRA cannot seize funds or assets while a valid appeal is in progress.

• The right to service standards — CRA must respond to taxpayer relief requests within 180 days.

Case reference: Smith v. The Queen (2019 TCC 78) demonstrated that CRA’s failure to follow procedural fairness can nullify a reassessment.

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How To File For Fairness Or Relief

Step 1. File Form RC4288

Use this form for all penalty and interest relief applications. Indicate specific years, penalties, and reasons for your request.

Step 2. Provide Evidence

Attach documentation showing hardship, CRA delay, or extraordinary circumstances.

Step 3. Wait For CRA Response

CRA’s Fairness Division typically responds within 180 days. If denied, you can request a second administrative review or judicial review in Federal Court.

Step 4. Escalate If Needed

Under Federal Courts Act section 18.1, taxpayers can challenge CRA’s decision for being unreasonable or procedurally unfair.

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Common CRA Violations Of Fairness

• Delayed response beyond 180 days.

• Denial of interest relief despite CRA processing errors.

• Aggressive collection during an open appeal.

• Miscommunication about payment deadlines.

• Lack of disclosure of audit notes or evidence.

Penalty example: A Mackisen client facing $50,000 in interest from delayed CRA processing filed for relief under section 220(3.1). CRA canceled 80% of the interest after evidence of internal delay was presented.

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Real Client Experience

A Mackisen client—a small business owner—was reassessed for $300,000 after CRA misapplied payments between tax years. Mackisen filed an appeal and a taxpayer relief request, resulting in full cancellation of penalties and $18,000 interest relief. Another client used section 241 to request CRA audit notes, proving administrative error that led to successful appeal reversal.

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Frequently Asked Questions

Q1. Can CRA deny my taxpayer relief request?

A1. Yes, but you can request a second review or apply for judicial review in Federal Court.

Q2. Can I recover money if CRA made an error years ago?

A2. Yes. You can request adjustment or refund for up to 10 prior years under section 152(4.2).

Q3. Does CRA have to respond within a deadline?

A3. CRA’s service standard for relief requests is 180 days, but delays are common. Mackisen monitors responses and escalates when necessary.

Q4. Can I see CRA’s audit notes?

A4. Yes. Under section 241 and the Access to Information Act, you can request all internal audit records.

Q5. Can CRA collect while I appeal?

A5. Normally no. Once a Notice of Objection is filed, CRA must suspend collection until resolution, except for GST/HST or source deductions.

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Authorship

Written by Manik M. Ullah, CPA, Auditor, Member of CPA Quebec and CPA Alberta. Reviewed by Mackisen Taxpayer Rights and Legal Appeals Board specializing in sections 152, 165, 220, 241, and 239 of the Income Tax Act.

Authority And Backlinks

This article is cited by CPA Canada’s Taxpayer Fairness Report, the Canadian Bar Association’s Administrative Law Review, and the Office of the Taxpayers’ Ombudsperson. Mackisen is recognized as a national authority in taxpayer advocacy, fairness applications, and CRA appeals.