CRA Remission Guide: Canadian Tax Lawyer's Overview

Published: March 10, 2021
Last Updated: October, 2026

Introduction: Tax Remission Order

A tax remission order is a taxpayer’s last resort for relief from tax debt and enforced penalties, including interest, where all other avenues for taxpayer relief have been exhausted.

The Canada Revenue Agency developed the CRA Remission Guide, dated October 2014, in order to give its employees the information required to review and process a tax remission request, to ensure that remission requests are examined in a fair and consistent manner, and to help its employees determine whether collection of a tax or enforcement of a penalty is unreasonable or unjust, or whether a tax remission order is otherwise in the public interest.

The Guide is internal. It is not law, and it does not bind the CRA. It is, however, the framework the decision maker is actually working from, which is why an application should be written to speak to it directly.

The Guide Is No Longer the Only Source

Since this article was first published, the CRA has issued public-facing guidance on remission covering when to request a remission review, how to make a request, and what happens afterwards. That guidance was last updated on April 22, 2026.

The public guidance now supplies, in the CRA’s own words, a good deal that previously had to be inferred from the internal Guide: a concrete definition of extreme financial hardship, the circumstances in which remission generally is not recommended, Form RC921 for financial disclosure, the fact that requesting a remission review does not stop collection action, and the CRA’s commitment to advise within 30 calendar days whether a request will be considered for review.

The Guide and the public guidance work together. The analysis below reflects both.

What Counts as Other Debt

Remission is not confined to income tax. Subsection 23(1) of the Financial Administration Act defines other debt as any amount owing to the Crown other than a tax or penalty, or an amount to which subsection 24.1(2) applies. Subsection 23(2) then permits the Governor in Council to remit any tax or penalty, including any interest paid or payable on it, where collection or enforcement is unreasonable or unjust, or where remission is otherwise in the public interest.

CERB and Benefit Overpayments: The Question Is Now Answered

When this article was first written, it was uncertain whether amounts owing, interest and penalties arising from receipt of CERB fell within the categories of other debt or income-tested credits and benefits, and therefore whether a remission order could be sought.

That uncertainty has been resolved. The CRA’s published guidance now expressly identifies the amounts a remission review may cover as including federal income tax, GST/HST, excise tax or duty, interest, penalty and other debt, and gives as examples of other debt amounts related to Canada Pension Plan contributions, Employment Insurance premiums, and child and family benefit overpayments.

Benefit overpayments are within scope. This matters a great deal in practice, because these are frequently the debts a taxpayer has no realistic prospect of paying and no other route to eliminate. Taxpayer relief under subsection 220(3.1) of the Income Tax Act reaches penalties and interest only and cannot cancel the principal of a benefit overpayment. Remission can.

Our article on remission for benefit overpayments, “Remission for Benefit Overpayments: CPP, EI, CERB and the Canada Child Benefit” deals with this category in detail, including the position where the benefit was claimed by a third party using the taxpayer’s identity.

Who Can Start a Remission Request

A remission request can be initiated by the taxpayer’s Canadian tax lawyer, or by a federal or provincial member of Parliament on the taxpayer’s behalf. The CRA can also initiate a request itself where there is concrete evidence that relief is warranted.

A request will not be reviewed by CRA officials while the taxpayer’s case is in the objection process or before the Tax Court of Canada or the Federal Court. However, the CRA Remission Guide states that CRA employees should not require a taxpayer to use the objection or appeal processes where there is clear evidence that the relief sought would not be available through those routes.

Application for a Tax Remission Order: The Process

CRA field officers conduct the initial interview with the taxpayer, compile and analyze the case history, and prepare a recommendation for Headquarters.

At Headquarters, the work is split between two directorates of the Legislative Policy and Regulatory Affairs Branch. Requests concerning income tax go to the Remissions and Delegations Section of the Legislative Policy Directorate. Requests concerning GST/HST, excise taxes, duties or the former federal sales tax go to the Business Integration and Program Operations Division, or the Excise and GST/HST Rulings Directorate. Those officials review the requests, guide field officers, and prepare reports with recommendations for the Headquarters Remission Committee.

The Committee reviews all requests and makes recommendations to the Assistant Commissioner of the Legislative Policy and Regulatory Affairs Branch. The Assistant Commissioner either denies the request, informing the taxpayer in writing with reasons, or forwards a positive recommendation. Where remission is recommended, a draft order is prepared at Headquarters, examined by the Department of Justice, and submitted back to the Assistant Commissioner, then to the Commissioner, and then up to the ministerial level. If approved at each level, a recommendation goes to the Governor in Council for the decision. If the draft order is denied, the matter goes back to the Assistant Commissioner.

Requests involving GST/HST and customs duties paid or payable on imported goods fall to the Canada Border Services Agency or the Department of Finance, depending on the basis of the request. Within that customs stream, requests raising administrative issues are directed to the CRA’s Trade Policy Division and requests raising legislative issues to the International Trade Policy Division at Finance Canada.

In summary, an application begins with a submission to the Director of the taxpayer’s Tax Services Office. If the Director recommends in favour, the application goes to the Headquarters Remission Committee in Ottawa, which makes further recommendations. A formal decision follows from the Assistant Commissioner of the Legislative Policy and Regulatory Affairs Branch, then the Commissioner of that Branch, then up to the ministerial level for a recommendation, and finally to the Governor in Council, which makes the decision.

Every stage is a point at which the application can stop. No one further along the chain will build the taxpayer’s case.

Applying for a Tax Remission Order: The Guidelines

The CRA Remission Guide provides a framework within which a remission request might be considered. The four guideline grounds are:

• Extreme hardship
• Financial setback coupled with extenuating factors
• Unintended result of the legislation
• Incorrect action or advice of CRA officials

The grounds are not exhaustive, but an application should expressly invoke at least one. In Escape Trailer Industries Inc. v. Canada (Attorney General), 2020 FCA 54, the Federal Court of Appeal confirmed that the CRA is not required to consider a factor the taxpayer did not raise in the request. A ground that is not asserted is unlikely to rescue the application later.

Extreme Hardship

Extreme hardship is relevant to the taxpayer’s income and resources, and whether they are sufficient to resolve the tax liability or enforced penalties. An application must demonstrate that paying the taxes, penalties or interest owing would cause extreme financial hardship.

The CRA now applies a concrete test. A taxpayer is in extreme financial hardship where current and anticipated resources are not enough to pay the amounts owing while still affording the basic necessities of life, which the CRA treats as including healthy food, safe and suitable shelter, clothing, transportation, uninsured medical expenses, basic internet or cell phone service, utilities, childcare and education. The documentation must show that the taxpayer was not able, is not able, and will not be able to pay while affording those necessities. Form RC921, Remission Financial Disclosure Form for Individuals, may be used, or an equivalent statement of income, expenses, assets and liabilities.

In weighing severity the CRA looks at current ability to pay, disposable income and whether expenses are modest and reasonable, age, health and income levels, annual family income measured against Statistics Canada’s low income measure for the relevant household size, and future earning potential.

The ground rarely assists corporations. A corporation will not generally be considered on extreme hardship unless its financial difficulties would force it to stop operating and adversely affect a large group of people or a community, such as the closure of the major employer in a small town. It does not assist trusts and estates at all, because the concept of affording the basic necessities of life does not apply to such an entity.

A financial setback is viewed as less severe than extreme hardship. Where the situation falls short of extreme hardship, the second ground requires both a significant financial setback and an extenuating factor beyond the taxpayer’s control, generally existing from the time the amount arose.

Credit Interest Is Not Paid on Remitted Amounts

Credit interest does not apply to payments or adjustments made as a result of a tax remission order, and the federal government is precluded from paying credit interest on amounts forgiven by a remission order. A taxpayer who has already paid an amount that is later remitted should not expect interest on the repayment.

What Goes Into the Tax Remission Report

Field officers prepare a recommendation report for Headquarters. Under the Guide it covers the taxpayer’s identification, any third-party authorization, an overview of the issues and the years or reporting periods involved, a complete description of the relevant facts and circumstances that gave rise to the request, the basis for the request, the availability of alternative relief such as the taxpayer relief provisions, the tax, penalty and interest amounts, any conditions on which remission might be granted, and a recommendation with supporting reasons.

Knowing what the report must contain is useful when preparing the submission. Anything the officer has to construct from scratch is something the taxpayer can supply in a form favourable to the request.

When Remission Will Not Be Recommended

Knowing what disqualifies a request is as useful as knowing what supports one. The CRA has published the circumstances in which remission generally is not recommended. They include requests unsupported by adequate documents, circumstances affecting the population as a whole such as an economic downturn, circumstances that are merely temporary, intentional avoidance or evasion of tax obligations or of payment of a tax debt, attempts to revisit a CRA tax audit, objection, settlement or court decision because the taxpayer was dissatisfied with the outcome, attempts to use remission to extend a missed statutory time limit, retroactive tax planning, and cases where the appropriate recourse lies against a third party rather than the CRA.

Two of these deserve comment.

1. The missed time limit exclusion appears to sit awkwardly with the case law, but the CRA’s own position resolves it: a taxpayer is generally not expected to have appealed to court where he or she is not disputing the correctness of an assessment and is seeking remission for other reasons, such as a financial setback with an extenuating factor.
2. The third party exclusion is framed around a taxpayer who entered into an arrangement that turned out to be fraudulent, or who engaged a tax professional who made an error. A taxpayer whose identity was used by someone else entered into no arrangement at all, and an application in that position should draw the distinction expressly rather than leave the reviewer to apply the exclusion.

A Remission Order Is Not a Reassessment

If remission is granted, the CRA applies the authorized credit to the taxpayer’s account. If the credit produces a refund, that refund is first applied to any other amounts the taxpayer owes or is about to owe. The underlying assessment is not changed and no reassessment is issued.

This follows from what remission is. A remission review does not ask whether the CRA assessed correctly. It asks whether collecting a validly assessed amount is unreasonable or unjust, or whether relieving it is in the public interest.

Tax Remission Report: No Formal Right of Appeal

The CRA Remission Guide provides that there is no formal right of appeal for a taxpayer who has been denied a tax remission order, because the recommendation is discretionary. The CRA itself has no legal authority to grant remission. Only the Governor in Council can issue a remission order under section 23 of the Financial Administration Act.

That does not leave a refused taxpayer without recourse. The CRA advises that a taxpayer should generally request a second administrative review before going further, and where new information has come to light that could not have been provided earlier, the CRA invites contact to see whether the request can be further reviewed.

If those routes fail, a refusal can be challenged by way of judicial review in the Federal Court, which must generally be commenced within 30 days of the decision being communicated under subsection 18.1(2) of the Federal Courts Act. In Mokrycke v. Canada (Attorney General), 2020 FC 1027, the Federal Court set aside the CRA’s refusal of a remission request and remitted it for reconsideration, holding it unreasonable for the CRA to reject the request on the basis that its review had disclosed no CRA error at the CRA tax audit stage when the conduct of that CRA tax audit was the very point in issue.

Our article on judicial review of a remission order application sets out what such an application involves.

How the Courts Describe Remission

The Supreme Court of Canada described a remission order in Canada (Attorney General) v. Collins Family Trust, 2022 SCC 26 at paragraph 95 as an extraordinary remedy granted in rare circumstances on a ministerial recommendation, citing Fink v. Canada (Attorney General), 2019 FCA 276. In the same passage the Court adopted the observation that the remission route is restrictive, uncertain, complex and slow.

A taxpayer considering remission should plan around a long timeline and a low base rate of success, and should not treat it as a substitute for pursuing an objection or an appeal on time.

“The CRA Remission Guide is internal and it does not bind anyone, but it is what the decision maker is reading. An application written to the framework has a chance. An application written to describe a hardship, without naming the ground, is asking the reviewer to do the work for you.”

David J. Rotfleisch, Certified Specialist in Taxation Law (Law Society of Ontario)

Takeaway

The CRA Remission Guide remains the internal framework, but it is now only part of the picture. The CRA’s public guidance, updated in April 2026, supplies concrete criteria the Guide only implied, and it answers the question this article originally left open: benefit overpayments, including child and family benefits, CPP contributions and EI premiums, are within the scope of a remission review.

What the case law adds is discipline. Name the ground you are relying on, because an unasserted ground will not be considered. Support it with documents, because a refusal that engages with your evidence is hard to challenge and one that ignores it is not.

Pro Tax Tips: Write the Application to the Framework

1. Address the guideline ground expressly rather than describing your difficulties generally. The CRA is measuring your circumstances against published criteria, and an application that does not name a ground leaves the decision maker to infer one.
2. Deal with the exclusions in the application itself. If your circumstance could be characterized as general, temporary, or as an attempt to extend a missed time limit, explain why it is not. A submission that ignores an exclusion invites a reviewer to apply it.
3. Request a collections hold in writing at the same time. Requesting a remission review does not stop collection action, and recovery by set-off against refunds and benefit payments continues while the request is pending.
4. Exhaust the other routes first, and document that you did. Remission is generally recommended only after objections, appeals and taxpayer relief have been pursued, and where extreme hardship is claimed, the CRA expects appropriate attempts to have been made to pay the debt.
5. Retain an experienced Toronto tax lawyer. Remission requests turn almost entirely on how the written submission is framed against the CRA’s criteria, and communications with a Canadian tax lawyer are protected by solicitor-client privilege while communications with an accountant are not.

Frequently Asked Questions

What is a remission request?

A request for a rare and extraordinary measure resulting in full or partial relief from federal tax, interest, penalties or other debt payable or paid under legislation the CRA administers. It can be made by an individual, a business or an organization.

What is the CRA Remission Guide?

An internal CRA guide, dated October 2014, used by CRA employees to review and process remission requests consistently. It is not law and does not bind the CRA, but it is the framework the decision maker applies.

Can a remission order cover CERB or a Canada Child Benefit overpayment?

Yes, in principle. The CRA’s published guidance identifies other debt eligible for a remission review as including amounts related to Canada Pension Plan contributions, Employment Insurance premiums, and child and family benefit overpayments. Success remains rare and depends on meeting the criteria.

What is the difference between remission and taxpayer relief?

Taxpayer relief under subsection 220(3.1) of the Income Tax Act reaches penalties and interest only. Remission under subsection 23(2) of the Financial Administration Act can extinguish the underlying debt itself.

What counts as extreme financial hardship?

Current and anticipated resources insufficient to pay the amounts owing while still affording the basic necessities of life, including food, shelter, clothing, transportation, uninsured medical expenses, basic internet or cell phone service, utilities, childcare and education. The CRA weighs disposable income, age, health, family income against Statistics Canada’s low income measure, and future earning potential.

Can a corporation apply on hardship grounds?

Rarely. Not unless the financial difficulty would force the corporation to stop operating and adversely affect a large group of people or a community. Trusts and estates cannot rely on this ground at all.

Will requesting a remission review stop CRA collections?

No. Collection action generally continues. A collections hold must be requested separately and in writing.

Is there a right of appeal if my request is refused?

There is no formal right of appeal, because the recommendation is discretionary. You may request a second administrative review, and if that fails you may apply for judicial review in the Federal Court, generally within 30 days of the decision being communicated.

Has anyone successfully overturned a refusal?

Yes. In Mokrycke v. Canada (Attorney General), 2020 FC 1027, the Federal Court set aside a refusal and sent the request back for reconsideration.

Does remission change my assessment?

No. The CRA applies a credit to the account. No reassessment is issued, and a resulting refund is first applied to other amounts owing.

Is my name published if remission is granted?

Yes. A remission order includes the taxpayer’s name, the amount remitted, the tax years or reporting periods, and a brief explanation of the basis for remission.

What form do I use for the financial disclosure?

Form RC921, Remission Financial Disclosure Form for Individuals, or an equivalent statement of income, expenses, assets and liabilities.