Canada Revenue Agency Tax Collections Policies – Information Circular IC98-1R6 Dated January 2017


IC98-1R6 is the newest information circular released from the Canada Revenue Agency (the “CRA”) regarding its CRA tax collection policies. This article will identify and describe changes between the current document (IC98-1R6) and its predecessor (IC98-1R5).

What are Information Circulars?

An information circular is a resource document published by the CRA. These documents are not legally binding: they are simply the CRA’s interpretation of tax law. While these documents often accurately reflect the current state of tax law, at other times they may not.

Summary of Changes Made to IC98-1R6 – Taxpayer Relief

Few revisions were made. In fact, the only revisions made to this year’s circular were to the previous “Taxpayer Relief Provisions” section. The changes are summarized below:

  • The title of the section now reads “Cancel or waive penalties or interest” instead of “Taxpayer Relief Provisions.”
  • A list of information regarding when the 10 calendar year period for relief begins has been removed. For example, “… for 10 calendar years after: the end of a reporting period under Parts I to VII of the Excise Tax Act,” was removed. This is one item from a six item list. The entire list was removed.
  • Instructions to send Form RC4288 to the tax centre where you file your returns were removed.
  • General information about waiving penalties and interest was added.
  • The URL for the webpage is now “ relief” and not “” Despite the change, the previous URL “” is still active.

Tax Consultants Canada Analysis of the Changes

All in all, the section now reads as a program summary which focuses on a general description of the 10 calendar year limitation rule. This rule is important as relief can only be applied up to 10 calendar years before you make your request for interest and penalty relief. For example, if you file an application in 2017, relief can only be applied to penalties or interest that has accrued since 2007.

It also focuses on how the program is discretionary, meaning that the CRA is not obligated to provide relief from penalties and interest once an application is submitted; however, they may choose to do so where taxpayers are “unable to meet their tax obligations due to circumstances beyond their control.”

It is also important to note that taxpayer relief does not apply to any underlying amounts of tax. Underlying tax amounts form the basis of a tax assessment or reassessment. The onus is on the taxpayer to prove these amounts are incorrect in order to be waived or reduced. Underlying tax amounts must be challenged through either the tax notice of objection process or through an appeal to the Tax Court of Canada.

“Taxpayer relief” refers only to relief from interest and penalties that were applied to underlying amounts of tax. Perhaps confusion about the scope of the relief available under the taxpayer relief program is what motivated the title change from “Taxpayer Relief Provisions” to “Cancel or waive penalties and interest.”

Given the discretionary nature of the program, you will benefit from receiving tax legal advice before submitting your application. Our lawyers are expert Canadian tax consultants and regularly file these applications and can best present a taxpayer’s unique circumstances when applying for interest and penalty relief under the taxpayer relief provisions.