Form T1135 – the Foreign Income Verification Statement – must be filed by any Canadian resident taxpayer (individual, corporation, or certain trust/partnership) who at any time in a year owns specified foreign property with a cost of more than C$100,000. This requirement is intended to ensure taxpayers report foreign-source income and assets. Understanding what constitutes “specified foreign property” (SFP) is critical, as it determines whether a T1135 filing is required. Below, we examine the statutory definition of SFP under the Income Tax Act (Canada) (ITA). We also note considerations for individual vs. corporate filers and briefly mention the availability of the Voluntary Disclosures Program for those who have failed to file form T1135.

Statutory Definition under the Income Tax Act (Canada)

The term “specified foreign property” (SFP) is defined in subsection 233.3(1) of the ITA. The definition encompasses a broad range of assets held outside Canada or in foreign entities, and generally include the following key categories:

• funds or intangible property, or for civil law incorporeal property, situated, deposited or held outside Canada (e.g. cash held in foreign bank accounts, patents or copyrights situated abroad. According to the CRA, stock of Canadian-resident companies if held by the taxpayer through a foreign broker or custodian outside Canada),

• tangible property, or for civil law corporeal property, situated outside Canada (e.g. precious metals held outside Canada),
• a share of the capital stock of a non-resident corporation,
• an interest in a non-resident trust (e.g. an ownership interest in a foreign trust, such as a foreign mutual fund trust, acquired by purchase or investment),
• an interest in a partnership that owns or holds specified foreign property (the CRA provides that if a Canadian taxpayer is a partner in a partnership that itself owns SFP, the partnership interest is SFP (unless the partnership is itself required to file a T1135 as a “specified Canadian entity”),
• an interest in, or right with respect to, an entity that is non-resident (this captures convertible or exchangeable instruments, options, etc. related to foreign assets),
• indebtedness owed by a non-resident person (e.g. funds lent to a non-resident person or entity, including foreign government or corporate bonds, mortgages, notes, and other receivables from non-residents), and
• an interest in, or for civil law a right in, or a right — under a contract in equity or otherwise either immediately or in the future and either absolutely or contingently — to, any property (other than any property owned by a corporation or trust that is not the person) that is specified foreign property (for example, a life insurance policy issued by a foreign insurer and gold certificates outside Canada could be SFP).

However, the ITA also excludes several categories of property from the definition of SFP. Excluded properties generally (i.e. not considered SFP) include:

• property that is used or held exclusively in the course of carrying on an active business of the person or partnership (determined as if the person or partnership were a corporation resident in Canada) (e.g., if a Canadian corporation owns a warehouse or equipment in a foreign country that is used solely for its active business operations, that asset is not SFP),
• a share of the capital stock or indebtedness of a non-resident corporation that is a foreign affiliate of the person or partnership for the purpose of section 233.4 of the ITA (such investments may need to be reported under separate foreign affiliate rules and Form T1134, not on T1135),
• an interest in, or indebtedness of, a non-resident trust that is a foreign affiliate of the person or partnership for the purpose of section 233.4 of the ITA,
• an interest in a non-resident trust that was not acquired for consideration by either the person or partnership or a person related to the person or partnership,
• an interest in a trust that is described in paragraph (a) or (b) of the definition exempt trust in subsection 233.2(1) of the ITA, or that would be described in paragraph (b) of that definition if it was drafted a certain way):
• an interest in a partnership that is a specified Canadian entity,
• a right with respect to, or indebtedness of, an authorized foreign bank that is issued by, and payable or otherwise enforceable at, a branch in Canada of the bank, and
• personal-use property of the person or partnership (e.g.  a vacation home owned abroad that the taxpayer uses primarily for personal vacations (and not to earn income) is considered personal-use property and is not reportable on T1135). The CRA interprets “primarily” as more than 50% personal use.

In summary, the statutory definition casts a wide net over foreign assets, but it also provides for significant carveouts. Tax professionals should first apply this definition to determine if a client’s foreign holdings are SFP. If the total cost of all such SFP exceeds C$100,000 at any point in the year, a T1135 filing is required.

Beneficial Ownership – Chan v. The Queen (2022 TCC 87)

One notable case is Chan v. The Queen, 2022 TCC 87. In this Tax Court decision, the taxpayer (Mr. Chan) had opened a foreign bank account in his own name in China, but did so on behalf of his father and with the father’s funds. The CRA assessed penalties for failure to file T1135, assuming Mr. Chan owned the Bank of China account. The Tax Court, however, found that Mr. Chan was not the beneficial owner of the account assets – his father was. The judge concluded that although the account was in the son’s name, the father provided all the funds and exercised all control and benefit from the account. Because the son did not actually own (beneficially) the foreign property, he was not required to file Form T1135 for that account. This ruling underscores that who “owns” specified foreign property is a substantive question of fact. Simply being listed as an account holder or legal owner is not conclusive if, in reality, the asset is held in trust for someone else.

Considerations for Individuals vs. Corporations as T1135 Filers

Both individual taxpayers and corporations (as well as trusts and partnerships) can have T1135 filing obligations, but the nature of their foreign properties and applicable exclusions may differ:

• Individuals: Common SFP for individuals include foreign bank accounts, investment accounts, foreign stocks or bonds, and foreign real estate. A key consideration is the personal-use property exclusion, which often applies to individuals’ vacation homes or personal assets abroad. Tax advisors should determine if a client’s foreign real property is primarily for personal use (excluded) or if it’s an income-producing rental or investment (included).
• Corporations: Canadian corporations must file T1135 for SFP they own above the threshold, and they often encounter the active business property exception. If a corporation’s foreign assets are integral to its active business operations (e.g. overseas branch office, machinery, inventory abroad), those assets are generally not SFP. Corporations commonly have foreign affiliates, which are excluded from SFP. Corporate filers should also note that the T1135 deadline for corporations aligns with their tax return due date (6 months after fiscal year-end), which differs from the individual deadline.

Regardless of taxpayer type, it’s important to document the purpose and use of each foreign asset. For instance, if a corporation claims an asset is used 100% in active business (to exempt it from SFP), maintaining evidence of that business use is prudent. Similarly, individuals claiming personal-use status for a property should be prepared to support the claim (e.g. usage logs). In all cases, keeping track of cost amounts of foreign properties is essential, since the $100,000 threshold is based on cumulative cost, not market value.

Voluntary Disclosures and Compliance

If a taxpayer realizes they failed to report specified foreign property when required, they should be aware of the CRA’s Voluntary Disclosures Program (VDP). The VDP allows taxpayers to come forward to correct previous omissions or errors, including unfiled T1135 forms, in order to avoid or reduce penalties. The CRA explicitly encourages taxpayers who have not filed or who have filed incomplete information to use the VDP to get back into compliance. A valid disclosure that meets the program’s conditions may result in reduction of penalties and interest.

Conclusion

Specified foreign property is defined broadly under Canadian tax law, and the scope of Form T1135 is extensive. By understanding the inclusions and exclusions in the definition, advisors can ensure that individuals and corporations meet their compliance obligations.

Annual Caseload and Filing Trends

The Tax Court of Canada (TCC) hears hundreds of tax dispute appeals each year. In recent years, the number of new cases (appeals) filed annually has been in the low-to-mid thousands, with notable fluctuations. In the fiscal year 2022–23, a total of 3,230 appeals were instituted or filed. This represented a slight decrease from 3,426 cases filed in 2021–22, but a significant rebound from the 2,325 cases filed in 2020–21, when filings dropped (likely due to pandemic-related disruptions). Prior to 2020, the Court’s caseload was higher – for example, 5,211 new cases were filed in 2018–19, and 4,684 in 2019–20. This trend indicates that after a sharp dip in 2020–21, tax dispute filings have recovered towards pre-pandemic levels, though they remain somewhat below the peak numbers seen in the late 2010s.

Alongside new filings, the Court has been actively processing and disposing of cases. In 2022–23, the TCC disposed of 3,876 cases (through judgments, settlements, withdrawals, etc.), which actually exceeded the number of new filings that year. This helped reduce the backlog of active cases. As of March 31, 2023, there were 10,273 active proceedings pending before the Tax Court, down from 11,504 a year earlier. These figures suggest the Court improved its clearance rate, closing more cases than were opened in that period. By comparison, active caseloads in the late 2010s were around 10,500 cases, indicating that the overall pending volume has been relatively stable, with some pandemic-related variability.

Types of Tax Issues in Dispute

The Tax Court’s jurisdiction covers a range of federal tax matters, and the vast majority of cases involve income tax. As of the most recent data, about 81% of pending appeals are income tax disputes. For example, at March 31, 2023, there were 8,328 active Income Tax Act (Canada) cases in the Court’s inventory (out of 10,273 total). The next largest category of appeals relates to federal sales tax: roughly 15% of cases involve Goods and Services Tax/Harmonized Sales Tax (GST/HST) matters (approximately 1,584 active GST/HST cases at the same date..

A smaller share of the Court’s workload involves other statutes. Only about 3% of active proceedings are appeals under the Employment Insurance Act or Canada Pension Plan (e.g. disputes over EI premiums or CPP contributions/benefits), totaling 300–350 cases in recent years. The remainder (only a few dozen cases) fall into “other” categories (such as excise taxes, or other less common federal tax issues). These proportions have been relatively consistent in recent years – income tax issues dominate the docket, followed by GST/HST, with only a marginal number of cases concerning other taxes or programs.

Profile of Appellants: Individuals vs. Corporations

Both individual taxpayers and corporate taxpayers bring appeals to the Tax Court. The Court provides two procedural streams which tend to correlate with the type of appellant and size of dispute. Individual taxpayers (including unincorporated small businesses) frequently use the Informal Procedure, which is designed for simpler, lower-value cases. The informal track has no filing fee and does not require the appellant to hire a lawyer, but it is limited to disputes involving smaller amounts. This option is popular among individual appellants because of its accessibility and lower cost. In contrast, larger businesses (and some individuals with high-value disputes) proceed under the General Procedure, which has formal court processes (and typically involves counsel) and no monetary limit on the amount in dispute.

While official statistics do not specifically break down the proportion of cases by taxpayer type (individual vs. corporate), the nature of the procedural choices provides some insight. Many of the TCC’s appeals – especially those under the informal procedure – are launched by individual taxpayers challenging personal income tax assessments or GST credits. Corporate tax disputes (often involving significant amounts or complex issues) are fewer in number but can be prominent in the general procedure docket. Both categories of taxpayers are represented in the Court’s caseload. For instance, the Canada Revenue Agency (CRA) notes that when a taxpayer (individual or business) disagrees with an assessment and exhausts the internal objection process, they may appeal to the Tax Court under either the informal or general procedure as appropriate In practice, this means the TCC sees everything from self-represented individuals contesting modest personal tax adjustments, to large corporations litigating sophisticated tax avoidance or accounting issues.

Case Resolutions

Most tax appeals are resolved without proceeding to a full trial in court. Official analyses have shown that a substantial portion of Tax Court cases end in settlements or other resolutions before a judge issues a verdict. For example, in 2022–23 the Court held hearings (i.e. cases “heard in court”) in 713 cases, while 3,876 total cases were disposed that year. This implies that roughly four out of five dispositions were resolved through settlements, withdrawals or other non-trial closures, with only about 18% of cases requiring a court hearing and judgment. It is clear that settlement negotiations and alternative resolution mechanisms (such as settlement conferences facilitated by the Court’s process) play a major role in tax litigation, allowing many disputes to be concluded without a formal trial.

In summary, the Tax Court of Canada’s latest official statistics show a moderate volume of new cases each year (on the order of a few thousand, with recent increases post-2020), and a broad range of tax matters dominated by income tax issues. Appeals are brought by both individual Canadians and corporations, through procedures tailored to the size of the dispute. Most cases are resolved through settlements or other means before trial, reflecting an emphasis on dispute resolution; only a fraction proceed to a full hearing.

Scenario: A small corporation has been reassessed by the Canada Revenue Agency (CRA) for income tax, but the owner missed the 90-day deadline (plus the one-year extension) to file a notice of objection. Normally, missing this deadline means the tax debt is final and unchallengeable by the corporation. Faced with an unpayable tax bill, the owner puts the corporation into bankruptcy. What happens next, and is there any way to dispute the tax debt now?

Section 160 – Liability for Transfers to Non-Arm’s-Length Parties

Generally, when a tax debtor transfers property to a related or non-arm’s-length recipient for less than fair market value, section 160 of the Income Tax Act (Canada) (ITA) allows CRA to pursue the recipient for the transferor’s tax debt. In effect, the recipient becomes liable for the tax debt up to the lesser of the value of the transferred asset (minus the consideration received by the transferor) and the amount of the tax debt. For example, if a corporation owing taxes paid a dividend or transferred an asset to its shareholder (a non-arm’s-length person) without equivalent consideration, CRA can generally assess the shareholder personally under section 160 for the corporation’s income tax arrears (to the extent of the undervalued transfer). The shareholder and the corporation are then jointly and severally liable for that amount.

In our scenario, once the corporation is bankrupt (and cannot pay its tax debt), CRA often turns to such derivative assessments. The business owner might receive a section 160 assessment holding them personally liable for the corporate tax debt, especially if they received any funds or assets from the company for little or no consideration.

Defending a Section 160 Assessment – Contesting the Tax Debt

Importantly, being assessed under section 160 gives the individual a fresh chance to dispute the underlying tax debt. The section 160 assessment is a separate assessment against the transferee (the owner), who has their own right to object and appeal. Canadian courts have confirmed that a person assessed under section 160 must have a full right of defence to challenge the assessment made against the person, including an attack on the primary corporate assessment on which the person’s assessment is based. In other words, even though the corporation missed its objection deadline, the transferee can still argue that the corporation did not actually owe the amount of tax in the first place.

When responding to a section 160 assessment, several defences can be raised, including (but not limited to):

• No Tax Debt or Lower Tax Debt: The original taxpayer (e.g. the corporation) did not owe the assessed taxes – meaning the underlying tax assessment was incorrect. This is effectively challenging the basis of the tax debt.
• Valid Consideration: The transfer in question was not a gift or below-value transfer (for example, it was repayment of a loan or the recipient paid fair market value), so section 160 should not apply.
• Overstated Value: The property’s value was lower than the CRA assumed, reducing the transferee’s liability.

If any of these succeed, the section 160 assessment can be reduced or eliminated. Notably, lack of knowledge of the tax debt is not a defence – liability under section 160 can apply even if the transferee was unaware of the tax owing.

Practical Takeaways

This strategy – letting the corporation go bankrupt and dealing with a section 160 assessment – is a last resort. It underscores a peculiar quirk of tax law: a related-party recipient can get their “day in court” on the original tax issue, even if the primary taxpayer lost that right. However, invoking this strategy is risky and can lead to personal liability. The better course is always to file timely objections to tax assessments to avoid such predicaments. If you do find yourself facing a section 160 assessment after a missed objection, seek professional tax advice.

What it is: Canada’s Goods and Services Tax (GST) is a value-added tax of 5% on most supplies made in Canada. In participating provinces, an extra provincial component applies (the HST); zero-rated supplies are taxed at 0%, and exempt supplies are outside the tax and typically don’t allow input tax credits (ITCs). The Act places the tax on the recipient, and registrants must charge, collect, and remit it.

1) Do I need to register?

• Small supplier rule: If your total taxable revenues (worldwide, including associates) are ≤ $30,000 in the last four consecutive calendar quarters or in a single quarter, you’re a small supplier and do not have to register. Exceeding $30,000 means you cease to be a small supplier at that time.
• Mandatory registration: Once you are no longer a small supplier, you must register (generally within 30 days of first making a taxable supply not as a small supplier).
• Voluntary registration: You may register earlier (useful if you want to claim input tax credits).
• CRA’s step-by-step on when to register and when you start charging GST/HST is here.

2) What do I charge customers?

• Rates: Charge 5% GST or the applicable HST rate based on place-of-supply rules; zero-rated items (e.g., many basic groceries) are taxed at 0%; exempt supplies (e.g., many health, education, financial services) are not taxed. See CRA’s rate and place-of-supply guidance.

3) How do input tax credits (ITCs) work?

If you’re registered, you generally recover the GST/HST paid on business inputs by claiming ITCs in your return (subject to documentation/timing rules). See section 169 of the Excise Tax Act (Canada) (ETA) and CRA’s ITC overview.

4) Filing, remitting, and deadlines

• Net tax = GST/HST collected − ITCs: The ETA defines net tax in section 225.
• File & remit: Returns are filed and net tax is remitted under section 228 of the ETA.
• How often do I file? CRA assigns a reporting period based on your prior-year annual taxable supplies: ≤ $1.5M: Annual; >$1.5M to ≤ $6M: Quarterly; > $6M: Monthly. You can elect to file more frequently.
• Due dates:
  • Monthly/Quarterly: Return and payment due 1 month after the period end.
  • Annual: Filing 3 months after fiscal year-end; payment timing depends on whether you have business income and your year-end (e.g., many December 31 filers: payment Apr 30, file by Jun 15). See CRA’s deadline page here.
• Instalments (annual filers): If last year’s net tax ≥ $3,000, you may need quarterly instalments in the current year.

5) Records, invoices, and penalties

• Keep records: CRA requires you to keep GST/HST records (including support for ITCs) for 6 years from the end of the year to which they relate.
• Late filing/late payment: CRA may assess penalties and interest if returns or amounts aren’t received by the due date; penalties for late filing are provided under the ETA (e.g., section 280.1) and explained on CRA’s site.

The RC4288, Request for Taxpayer Relief – Cancel or Waive Penalties or Interest, is the CRA’s built-in safety valve. If you fell behind on your tax obligations because of events outside your control, serious financial hardship, or CRA’s own delays or mistakes, this is the form you use to ask the CRA to cancel or reduce penalties and interest.

This guide walks you through:

• Who actually qualifies (and who doesn’t)
• The 10-year deadline most people miss
• How to complete a strong, well-documented application
• What happens after you apply – including second reviews & judicial review
• Where a tax lawyer makes a real difference

1. What Is CRA Form RC4288?

Form RC4288 is the CRA’s standard form for a written request asking the Minister (through CRA officials) to:

1. Cancel or waive penalties, and/or
2. Cancel or waive interest on tax debts

It can be used by:

• Individuals
• Corporations
• Trusts
• Partnerships

Importantly:

• You’re asking for relief from penalties and interest – not from the underlying tax itself. The tax debt usually still has to be paid. In very rare cases, separate “remission orders” can relieve tax itself, but that’s a different, extraordinary process.
• You don’t technically have to use RC4288 – a detailed letter can also be a valid taxpayer relief request – but the CRA’s own procedures manual assumes RC4288 or equivalent written details, so using the form is strongly recommended.

2. The 10-Year Deadline You Cannot Miss

The taxpayer relief rules are subject to a strict 10-year rolling limitation period. You generally have 10 years from the end of the calendar year in which the interest accrued or penalties came into existence to ask for relief.

If your first RC4288 request for a particular year is outside that 10-year window, the CRA considers it invalid and will send it back – they legally cannot grant relief.

3. Who Can Apply for Taxpayer Relief? (The Real Eligibility Test)

The CRA’s internal guidelines say penalties and interest may be cancelled or waived in four main kinds of situations:

1. Extraordinary circumstances
2. Actions of the CRA
3. Inability to pay / financial hardship
4. Other circumstances, including some third-party or bank errors

The CRA is also required to consider other reasonable circumstances – their discretion is not limited to a rigid checklist.

Let’s unpack these.

4.1 Extraordinary Circumstances

These are events beyond your control that made it impossible or unreasonable to comply. CRA examples include:

• Natural or human-made disasters – flood, fire, major storms
• Serious illness or accident
• Death, serious illness, or accident in the immediate family
• Serious emotional or mental distress (marital breakdown, job loss)
• Civil disturbances or strikes that disrupt normal services

What CRA officers look for:

• Do the dates and details of the event line up with when you missed your obligation?
• How exactly did the event prevent you from filing or paying on time?
• Did you consider other ways to comply (e.g., using online services, authorizing a representative)?
• Are there supporting documents (police/fire reports, medical records, insurance claims, etc.)?

4.2 Actions or Delays by the CRA

The CRA can grant relief where:

• There were undue delays in processing an audit, objection, or appeal
• The CRA made errors, gave incorrect written information, or failed to notify you of an amount owing within a reasonable time
• CRA actions caused compounded interest to build up over a long period

4.3 Inability to Pay / Financial Hardship

Financial hardship isn’t just “this is inconvenient.” CRA looks for situations where, even with genuine effort:

• You have made bona fide efforts to pay down the debt over time
• But interest and penalties absorb a significant portion of each payment
• The arrears are so onerous relative to what you can realistically pay that it would be very difficult, if not impossible, ever to clear the account

For individuals, CRA often asks you to complete Form RC376 – Statement of Income and Expenses and Assets and Liabilities, then the CRA:

• Reviews your income and essential expenses (housing, food, utilities, medical, etc.)
• Distinguishes essential vs non-essential spending
• Analyzes your net worth and ability to borrow or liquidate assets

They then determine whether you truly cannot reasonably pay, or whether the issue is more about prioritization.

4.4 Third-Party Errors and Bank Mistakes

The default CRA position: you are generally responsible for your accountant, bookkeeper, or payroll provider’s errors.

However, the CRA manual on taxpayer relief confirms:

• CRA must consider other reasons, including third-party errors, and cannot deny relief simply because circumstances are “not extraordinary.”
• Relief may be appropriate where the representative faced an extraordinary event (e.g., sudden hospitalization) that prevented filing.
• Bank errors or delays (e.g., funds remitted on time but delayed by the bank’s system) may justify cancelling penalties/interest if the bank confirms the mistake.

Because CRA is cautious here, third-party error cases usually need careful framing and strong documentation.

5. What Penalties & Interest Can Be Waived?

RC4288 relief can target most interest and penalties assessed under the Income Tax Act (Canada) and Excise Tax Act (Canada), including:

• Late filing penalties – income tax, GST/HST, information returns
• Failure to remit penalties – payroll source deductions, GST/HST remittances
• Interest on unpaid tax, penalties, and some elections-related penalties (e.g., late-filed or amended elections)

But:

• It does not cancel the underlying tax (except via separate remission process, which is rare).
• It cannot be used to dispute the correctness of an assessment or penalty – that must be done through a notice of objection and, if needed, appeals.

6. How to Fill Out Form RC4288 (Step-by-Step)

Step 1 – Identify Yourself and Your Account

Complete the appropriate section:

• Individuals: Full legal name, SIN, current address, phone
• Businesses: Legal name, Business Number (BN), program accounts (e.g., RP, RT, RC)
• Trusts: Trust name and Trust Account Number

Make sure the contact information matches CRA’s records.

Step 2 – Specify the Type of Relief

The form will ask what you’re requesting relief for. Common boxes to tick:

• Penalties
• Interest
• Both penalties and interest

You must also list the years or reporting periods involved for each account (T1, T2, GST/HST, payroll, etc.).

Step 3 – Explain Your Circumstances (This Is the Heart of Your Application)

This is where strong applications distinguish themselves.

Your explanation should:

1. Tell the story chronologically
   • What happened
   • When it happened
   • How it affected your ability to file or pay
2. Connect the dots for CRA
   • Link specific events (e.g., hospitalization dates, disaster dates, CRA delays) to specific missed deadlines or periods
3. Show responsible behaviour
   • Efforts to comply despite the problem (extensions requested, partial payments, attempts to contact CRA)
   • Evidence of improved compliance – filing on time now, current payments up to date
4. Address financial hardship (if applicable)
   • Outline income, essential expenses, debts and assets (often via RC376)
   • Explain why, even with a reasonable payment plan, the interest/penalty component makes repayment unrealistic

Step 4 – Attach Supporting Documentation

Examples of helpful documents:

• Medical records, hospital discharge summaries, doctor’s letters
• Death certificates, funeral documentation
• Police, fire or insurance reports for disasters or theft
• Bank letters acknowledging errors or delays
• Correspondence with CRA showing delays, errors or incorrect information
• Financial documents (RC376, bank statements, income statements, tax returns, payment history)

The CRA’s own manual stresses that complete requests allow officers to exercise discretion properly and avoid delays.

Step 5 – Sign and Submit

• Ensure the form is signed by the taxpayer or an authorized representative (with valid authorization on file).
• Submit the RC4288 and supporting documents:
  • By mail to the appropriate CRA Tax Centre (address on the form); or
  • By uploading through CRA My Account / My Business Account (if available), selecting the “Submit documents” option for taxpayer relief.

7. How Long Does CRA Take to Process RC4288?

In practice, CRA relief reviews commonly take several months, and complex or hardship-heavy files can take longer.

Internally, files are categorized by complexity and processed through “first review” and “second review” levels. Complex cases (e.g., multiple years, memorandum assessments, financial hardship plus CRA action) are treated as higher complexity workloads.

While you wait:

• Keep filing current returns on time
• Make reasonable payments toward your balance where possible – this supports hardship arguments and shows good faith.

8. What Happens After You Submit Form RC4288?

8.1 First Review

Your first application for a given year/issue goes through a first review. This covers:

• The first time you’ve asked for relief for that year/period and penalty/interest; or
• Additional information submitted before a decision is made; or
• Clarifications requested by CRA during their review

At the end of the first review, CRA will issue a written decision letter, which may:

1. Approve full relief – all specified penalties and/or interest are cancelled
2. Approve partial relief – only certain years or amounts are reduced
3. Deny relief – no change to penalties or interest

Adjustments are then processed on the relevant CRA systems (e.g., T1, T2, GST/HST) and reflected on your account.

8.2 Second Review (Internal Appeal)

If you disagree with the first decision, you can ask for a second review. This is another discretionary review, typically by a different officer or team. You can request a second review whether or not you have new information or arguments – but new, well-framed information helps.

8.3 Judicial Review in Federal Court

There is no formal appeal to the Tax Court for taxpayer relief decisions. Instead, if you believe CRA misused its discretion (e.g., ignored relevant facts, applied rigid rules, or misunderstood the law), you can seek judicial review in Federal Court.

Important:

• The Court doesn’t simply “re-decide” your relief request. It reviews whether CRA exercised its discretion reasonably and fairly.
• If the Court finds problems, it normally sends the matter back to CRA for a new decision by a different official, with directions to consider the file properly.

9. Common Reasons RC4288 Requests Fail

From both practice and CRA’s own guidance, we see the same pitfalls again and again:

• Missing the 10-year deadline for a first request
• Using RC4288 to argue what should be argued in a Notice of Objection
• Providing vague explanations (“had personal issues,” “business was slow”) with no dates or detail
• Failing to connect events to specific missteps (e.g., which year’s return was late and why)
• Claiming financial hardship but providing no financial disclosure or clearly non-essential spending patterns
• Relying solely on “my accountant messed up” without explaining why relief is still fair in your particular case

10. How a Tax Lawyer Can Strengthen the RC4288 Application

A well-prepared RC4288 package is part law, part accounting, and part storytelling. At Taxpayer Law, we help by:

• Assessing eligibility:
  • Identifying which years are still within the 10-year window
  • Determining whether your facts align with CRA’s categories (extraordinary circumstances, CRA actions, hardship, or other)
• Building a persuasive narrative:
  • Organizing events, timelines and evidence so the CRA officer doesn’t have to dig
  • Making sure every fact in your story ties back to specific penalties and interest
• Preparing complete documentation:
  • Drafting detailed written submissions
  • Assembling medical, financial, and third-party evidence in the way CRA expects
• Managing CRA communications:
  • Handling information requests, clarifications and follow-ups
  • Ensuring your rights are respected and deadlines aren’t missed
• Challenging unfair decisions:
  • Requesting a second review with focused new arguments
  • Pursuing judicial review in Federal Court where CRA has misapplied its discretion

11. Need Help With Form RC4288?

If penalties and interest are overwhelming you, you do have options – but relief is never automatic, and poorly prepared RC4288 requests are often denied.

If you’d like help:

• figuring out whether you qualify,
• understanding your 10-year deadline, or
• preparing a strong RC4288 application or second review,

Contact Taxpayer Law for a free consultation. We can review your CRA account, your facts, and your options – and help you put your best possible case forward for taxpayer relief.