- A refused request to cancel penalties or interest is a CRA administrative relief decision, not a Tax Court appeal.
- If the CRA's second review also goes against you, you can apply to the Federal Court for judicial review within 30 calendar days of receiving the decision.
- Disputing the assessment itself is a different path that runs through a notice of objection and then the Tax Court.
You asked the CRA to cancel penalties or interest, and the answer was no. It is natural to wonder whether the Tax Court of Canada, which hears tax disputes, is the next stop.
No, a refused request to waive or cancel penalties or interest under ITA s. 220(3.1) is a CRA administrative relief decision, not a Tax Court appeal. This article explains why a relief decision follows a different route than an assessment appeal, what the Federal Court's role is, and how short the time limits are.
This article covers Canadian federal tax law, which applies in every province.
Two different kinds of disagreement
A tax dispute can be about the assessment itself, such as whether income was reported correctly. Or it can be about whether the CRA should use its discretion to forgive a penalty or interest charge. These are handled by different processes.
The Minister may waive or cancel penalties or interest under section 220(3.1) of the Income Tax Act on or before the day that is ten calendar years after the end of the taxation year. That is a CRA administrative relief decision, not a Tax Court appeal.
Why the Tax Court is not the route
The Tax Court appeal right in the Income Tax Act follows a notice of objection and the Minister's confirmation or reassessment, and asks the Court to vacate or vary the assessment. A refusal of discretionary relief is not that kind of decision, and the CRA treats it as outside a Tax Court appeal.
There is one nearby situation to keep separate. If the dispute is only about interest that was assessed under the Income Tax Act, the informal procedure of the Tax Court can apply. That concerns a challenge to the assessed interest, not a challenge to a refused relief request. Which category your problem falls into can depend on the facts, so confirm it with a lawyer or accountant.
What you can do after a refusal
- Ask for the second administrative review that the CRA offers when a relief request is refused.
- If you think the CRA was not fair and reasonable, apply to the Federal Court for judicial review within 30 calendar days of receiving the decision.
- Know that a Federal Court judge may allow a further period, but you should not count on that.
The general rule is that an application for judicial review must be made within 30 days after the decision is first communicated.
Comparing the two paths
| Assessment dispute | Refused relief request | |
|---|---|---|
| First step | Notice of objection to the CRA | Second administrative review |
| Court | Tax Court of Canada | Federal Court judicial review |
| Key time limit | 90 days after the confirmation or reassessment notice was sent | 30 calendar days from receiving the decision |
What to do next
- Find the date you received the refusal and mark the 30-day limit right away.
- Keep the relief request, the CRA's reasons and all letters together.
- Check whether you are also disputing the underlying assessment, since that has its own objection deadlines.
- Speak with a lawyer or accountant before the review period runs out, because the time is short.
Frequently asked questions
Can the Tax Court cancel my penalties if the CRA refused relief?
A refusal of relief under section 220(3.1) is an administrative relief decision, not a Tax Court appeal. The route for challenging it is judicial review in the Federal Court.
How long do I have to go to the Federal Court?
The CRA says you can apply within 30 calendar days of receiving the decision. The Federal Courts Act sets 30 days after the decision is first communicated, and a judge may allow a further period.
Is there anything to try before the Federal Court?
Yes. If a relief request is refused, the CRA offers a second administrative review. Ask about it promptly because the court deadline is short.
What if I also disagree with the tax assessed?
That is a separate dispute. You file a notice of objection, and after the Minister confirms or reassesses you may appeal to the Tax Court.
Sources
- Income Tax Act s. 169 — Justice Laws (federal)
- Income Tax Act s. 165 — Justice Laws (federal)
- Tax Court of Canada Act s. 18(2) — Justice Laws (federal)
- Income Tax Act s. 220(3.1) — Justice Laws (federal)
- CRA After you apply (taxpayer relief) — canada.ca
- Federal Courts Act s. 18.1 — Justice Laws (federal)
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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