Identity Theft, Human Trafficking, and CRA Benefit Overpayments: What Survivors Need to Know
A survivor of human trafficking who has escaped and begun rebuilding often finds that the Canada Revenue Agency is still taking money from her every year. (In Canada, approximately 93% of police-reported human trafficking victims are women and girls, while 7% are men and boys, according to data from Statistics Canada.) Not because she did anything wrong, but because someone else used her identity to claim benefits she never received, and the CRA is recovering the resulting overpayment from the only person it can identify: her.
CityNews Toronto reported in September 2026 on a Toronto woman who was groomed at fourteen and escaped after four years. Her traffickers opened payday loans, credit cards, and phone accounts in her name, leaving her with more than $65,000 in consumer debt, which she eventually cleared with the help of volunteers. What she has not been able to clear is the tax side. Her trafficker claimed CERB in her name during the pandemic and also claimed a large portion of her Canada Child Benefit. The CRA has been recovering that money by clawing back her tax refunds, her Canada Child Benefit, and her GST/HST credit, while she studies at university as a single mother on a fixed income. She reports that the CRA has not been willing to meet with her to hear the context.
That last point is the one worth dwelling on, because it is fixable, and because it is the part most survivors and most advisors get wrong. The problem is not that nobody at the CRA can grant relief. The problem is that the request is being made through a channel that has no authority to grant it.
How a Trafficker’s Identity Theft Turns Into a CRA Debt
Two separate problems commonly arise, and they are governed by different rules and different relief mechanisms. Conflating them is the single most common reason a survivor’s file goes nowhere.
The first is a benefit overpayment. A trafficker with control of a victim’s identity documents, bank account, and CRA account can claim emergency benefits, the Canada Child Benefit, and the GST/HST credit in the victim’s name and direct the payments to an account the trafficker controls. When the CRA later determines that the recipient was not entitled, the amount becomes a debt of the person in whose name it was claimed, and the CRA recovers it without needing to sue or obtain a judgment.
The second is unreported income. A survivor who was forced to earn money that a trafficker immediately took may have years of income that was never reported, or that was reported incorrectly by someone filing without authority. That is a disclosure problem rather than a collections problem, and it is dealt with under the Voluntary Disclosures Program.
A survivor can easily have both at once. The order in which they are addressed matters.
Key Issues and Findings
The CRA recovers benefit overpayments by set-off, without going to court
This is why the clawback feels relentless. Subsection 164(2) of the Income Tax Act, under the marginal note “Application to other debts,” provides that instead of making a refund the CRA may, where the taxpayer is or is about to become liable to make any payment to the Crown in right of Canada or of a province, apply the refund to that other liability and notify the taxpayer of having done so. Section 155 of the Financial Administration Act is broader: where a person is indebted to the Crown, the responsible authority may authorize retention of the amount by deduction from or set-off against any sum of money payable by the Crown to that person. Section 160.1 of the Income Tax Act addresses the recovery of amounts refunded in excess of entitlement, and subsection 160.1(4) deems an amount applied to a liability in excess of the taxpayer’s refund entitlement to have been refunded on the day it was applied.
There is a further trap in subsection 164(2.01). The CRA is prohibited from refunding, repaying, applying to other debts, or setting off any amount at all unless every return the CRA knows to be required has been filed. A survivor with unfiled returns from the trafficking years is therefore not merely exposed to clawbacks. She is barred from receiving anything back until the filings are brought current, which is a further reason the filing side and the benefit side have to be worked in the same project.
The Canada Child Benefit operates through subsection 122.61(1), which deems an eligible individual to have made an overpayment of tax that is then refunded monthly. When entitlement is later reduced, the excess is recoverable, and the CRA routinely recovers it by reducing future monthly payments. The GST/HST credit works the same way.
The practical consequence is that a survivor does not get a demand letter she can respond to. She gets a permanently reduced income, applied automatically, with no step at which anyone weighs her circumstances.
Benefit eligibility criteria are non-discretionary, and the courts have said so
This matters because it defines what can and cannot be argued. In Flock v. Canada (Attorney General), 2022 FCA 187, affirming 2022 FC 305, the Federal Court of Appeal confirmed that the pandemic benefit eligibility criteria are statutory and non-discretionary, and that CRA officers cannot grant relief on humanitarian grounds because Parliament did not give them that power. The Federal Court has applied that holding consistently since, including in Devi v. Canada (Attorney General), 2024 FC 33 at paragraphs 29 and 30, where the Court noted that an officer has no choice but to assess entitlement against the statutory criteria, and in later decisions observing that a court on judicial review cannot substitute itself for the legislator however sympathetic the applicant’s circumstances.
The consequence for a survivor is that an argument built on sympathy will lose, and it will lose at the officer level before it ever reaches a court. An argument built on the proposition that she never applied, never received the money, and was the victim of a documented offence is a different argument entirely, directed at a different question, and it is the only one with anywhere to go.
The reviewable error is usually the CRA’s failure to engage with the evidence
Where survivors and other applicants have succeeded on judicial review, it has generally been because the CRA officer failed to grapple with evidence that was actually before him or her, not because the Court disagreed with the outcome.
In Maheshwari v. Canada (Attorney General), 2025 FC 1822, the Federal Court found a CRA decision unreasonable because the officer failed to reasonably consider all of the evidence submitted, including a notice of assessment, and gave no explanation for dismissing it. In Moncada v. Canada (Attorney General), 2023 FC 114, the Court found a decision unreasonable where the officer failed to mention invoices the applicant had provided and failed to explain why they were inadequate, when the CRA’s own guidelines identified invoices as a way to prove compliance.
The sequel is instructive: on the redetermination the same applicant was again found ineligible, and in Moncada v. Canada (Attorney General), 2024 FC 117, the Federal Court dismissed the second judicial review, holding the fresh decision reasonable and procedurally fair. Winning a judicial review sends the file back for a proper decision. It does not deliver the benefit. The Court in Moncada drew on Crook v. Canada (Attorney General), 2022 FC 1670 and Sjogren v. Canada (Attorney General), 2022 FC 951.
The governing standard is reasonableness, as set out in Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, which asks whether the decision demonstrates justification, transparency, and intelligibility. Our analysis of the standard of review for discretionary CRA decisions sets out how the Federal Courts have applied that framework to the CRA. Aryan v. Canada (Attorney General), 2022 FC 139 is frequently cited by the CRA for the proposition that a notice of assessment is not by itself conclusive proof of income.
The practical lesson is that the survivor’s file has to put the evidence squarely in front of the officer, in writing, so that a failure to address it is visible on the record.
Taxpayer relief does not cancel the principal
This is the most important misconception in this area, so it is worth setting out what the relief actually is.
Subsection 220(3.1) of the Income Tax Act is the statutory basis for what the CRA administers as the Taxpayer Relief Program, and which older material and many accountants still call the fairness provisions, after the Fairness Package that introduced them in 1991. The name changed; the substance did not. The provision permits the CRA to waive or cancel all or any portion of any penalty or interest otherwise payable under the Act. Penalty or interest, and nothing else.
Relief under the program is available where a taxpayer could not comply for reasons beyond his or her control, including circumstances such as serious illness, natural disaster, or actions of the CRA itself, and the categories are not closed. Coercive control by a trafficker is a strong fit for the “circumstances beyond the taxpayer’s control” ground. It is also discretionary, which has two consequences that matter enormously here. The Federal Court of Appeal’s decision in Barrs v. The Queen confirms that a CRA review officer must meaningfully engage with a relief request rather than simply record a conclusion. There is no right of objection or appeal from a refusal, so the notice of objection and Tax Court appeal routes are simply unavailable. The only recourse is a second-level review followed by judicial review in the Federal Court.
What it does not do is cancel the underlying tax or benefit overpayment itself. A survivor can win a taxpayer relief application in full and still owe every dollar of the CERB or Canada Child Benefit principal, having gained only the removal of interest running on it.
The same subsection carries a ten calendar year limit. In Bozzer v. Canada, 2011 FCA 186, the Federal Court of Appeal rejected the CRA’s restrictive reading and held that the CRA may waive interest that accrued within the ten years preceding the application even where the underlying tax debt arose long before that period. The CRA revised Information Circular IC07-1 to adopt that interpretation. For a survivor whose benefit debt dates from the pandemic years, the window is real but finite, and it should be diarized rather than assumed.
A survivor who applies for taxpayer relief on an overpayment of CERB or the Canada Child Benefit may succeed in having interest removed and still owe the entire principal. Applications are filed this way constantly without the limit being appreciated, and the survivor then concludes, reasonably but wrongly, that she has exhausted her options.
The route to cancelling the principal is a remission order, and the courts treat it as extraordinary
Where the principal itself needs to be forgiven, the mechanism is a remission order under subsection 23(2) of the Financial Administration Act, which permits the Governor in Council to remit a tax or penalty, including interest, where collection or enforcement is unreasonable or unjust or where remission is otherwise in the public interest.
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. The Court in the same passage adopted an observation that the remission route is restrictive, uncertain, complex and slow. The Federal Court of Appeal considered the scope of the remission guidelines in Escape Trailer Industries Inc. v. Canada (Attorney General), 2020 FCA 54, addressing the earlier decision in Waycobah First Nation v. Canada (Attorney General), 2011 FCA 191.
Our firm has written at length elsewhere on the remission order process and the CRA’s guidelines, and a survivor considering this route should start there. What is specific to a trafficking file is that the CRA’s own guideline categories, and in particular financial setback coupled with circumstances beyond the taxpayer’s control, map onto the facts unusually well. A debt created by a criminal offence committed against the person now being pursued for it is close to the paradigm case for the category, even though remission remains rare.
Mokrycke v. Canada (Attorney General), 2020 FC 1027, which we analyze in our overview of the tax remission order, is the decision most worth understanding here. The taxpayer had missed both the notice of objection deadline and the deadline to appeal to the Tax Court, and sought remission on the basis that the reassessments were wrong for reasons outside his control, having relied on tax professionals who failed to act. The Federal Court set aside the CRA’s refusal and sent the remission request back for redetermination, finding it unreasonable for the CRA to reject the request on the footing that its remission review had disclosed no error at the tax audit stage when the conduct of the CRA tax audit was the very thing in dispute, and faulting the CRA for giving no explanation for dismissing the argument that the failure of the taxpayer’s representatives was an extenuating circumstance.
The parallel to a trafficking file is close. A survivor’s position is that the filings and claims made in her name were made by a third party over whom she had no control, and that the CRA’s own record of what happened is not the whole picture. Mokrycke establishes that the CRA cannot simply decline to engage with that argument, and that a refusal which fails to explain why the extenuating circumstance was rejected is open to challenge.
“A tax remission order serves as a final recourse for taxpayers seeking relief from tax debt and enforced penalties, including interest, when all other means of taxpayer relief have been exhausted. Because tax remission orders are discretionary, they are only granted in exceptional circumstances.”
David J. Rotfleisch, Certified Specialist in Taxation Law (Law Society of Ontario)
A remission application will therefore only go forward to the Governor in Council after objections, appeals, and taxpayer relief have all been pursued. What makes a trafficking survivor’s file unusual is that the extenuating circumstance is documented by police rather than merely asserted.
The identity theft has to be established as a fact, not asserted
The CRA maintains an identity theft reporting process, and a confirmed identity theft changes how a file is handled. What a survivor needs is proof independent of her own account: police occurrence reports, charges, bail conditions, production order materials, and bank records showing that the benefit payments went to an account she did not control.
Where the trafficker was arrested and charged, that record exists and carries substantial weight precisely because it does not depend on the survivor’s credibility.
There is no statutory relief regime for trafficking survivors, and the gap is real
Ontario enacted Bill 41, the Protection from Coerced Debts Incurred in relation to Human Trafficking Act, in 2023. It addresses debts owed to consumer creditors. It has no application to a federal tax or benefit debt. That is why a survivor can clear tens of thousands of dollars of payday loans and credit card debt and remain stuck on the CRA side.
Research by Victim Services Toronto analyzing the credit reports of 156 survivors found roughly $2.2 million in trafficking-related debt across more than 1,200 financial institutions, and found that CRA debts, while less frequent than consumer debts, tend to be large when they arise, averaging over $10,000. The Canadian Centre to End Human Trafficking has found that traffickers systematically put the expenses of the operation in the victim’s name, both to control the victim and to insulate themselves from prosecution.
Implications for Canadian Taxpayers
Phone calls to the CRA will not resolve this
A survivor who calls the CRA to explain that she was trafficked is speaking to an agent with no delegated authority to cancel a benefit overpayment and no training in the subject. The absence of a sympathetic response is a structural feature, not a decision on the merits. The file has to be moved to somewhere a decision can actually be made, and that requires a written submission with a documentary record attached.
It is worth understanding how far a remission request has to travel. As set out in our published analysis of the remission process, the application goes first to the Director of the applicable Tax Services Office, then to the Headquarters Remission Committee in Ottawa, then to the Assistant Commissioner and the Commissioner of the Legislative Policy and Regulatory Affairs Branch, then up to the ministerial level for a recommendation, and finally to the Governor in Council, which makes the decision. No one on a general enquiry line is on that path.
The CRA does have specialized capacity, and it can be requested
This is the practical point missing from most coverage of this issue. The CRA does route files involving human trafficking victims to specialized internal handling, and a written request that a file be transferred, supported by police documentation confirming that the taxpayer is a victim known to police, can succeed. Our firm has obtained exactly that outcome. The section below describes how.
Ask for a collections hold at the same time
Recovery by set-off continues while a relief request is pending unless someone asks for it to stop. A request for a CRA collections hold on financial hardship grounds should be made in writing at the same time as the substantive submission, not afterwards. Every month that passes without one is money that then has to be recovered rather than simply not taken.
Second-level review before judicial review, and mind the thirty days
If the CRA refuses a discretionary request, the next step is a second-level review by a different and more senior CRA official, not an immediate application to the Federal Court. A second-level review is faster, costs far less, and frequently succeeds where the first-level decision was made on an incomplete record.
If a second-level review also fails, the remedy is an application for judicial review in the Federal Court under section 18.1 of the Federal Courts Act. Subsection 18.1(2) requires that the application be brought within thirty days after the decision was communicated, subject to an extension a judge may allow. That deadline is short and it is missed often.
As we explain in our analysis of judicial review of discretionary decisions by the CRA, a judicial review is not a trial. There are no witnesses and no new evidence. The case is built on affidavits and decided on the record that was before the CRA decision-maker, and the Court’s power is generally limited to sending the decision back to be made again rather than substituting its own answer. Evidence not put before the officer will generally not be considered, and new arguments raised for the first time in Court will generally not be entertained.
Resources:
- Our case comment on Couture v. Canada (Revenue Agency), 2024 FC 1283, sets out how an inadequately pleaded application can be struck before it is ever heard on the merits. That is precisely why the written record built at the CRA stage determines the outcome of everything that follows.
- Our case result on a judicial review of denied CERB and CRB benefits illustrates how the procedural side of such an application is run.
“It is important for Canadian taxpayers to understand exactly what it means for the Remission Order Application to be the last-ditch resort for tax relief.”
David J. Rotfleisch, Certified Specialist in Taxation
Judicial review is not a second chance to make the case. It is a review of the case already made. Where a survivor’s file fails, it usually fails because the evidence was never put in front of the officer in a form that required an answer.
If there is also unreported income, sequence it carefully
A survivor who also has unreported earnings needs a Voluntary Disclosures Program application governed by Information Circular IC00-1R7 and, for GST/HST, Memorandum 16-5-1. Two points matter. Voluntariness is assessed issue by issue rather than across the whole file, so an open CRA tax audit on one issue does not automatically taint the rest. And the documentation periods in IC00-1R7 are minima rather than ceilings, so the CRA retains full tax audit powers over any year left out.
Our firm’s position on the CRA’s Pre-Disclosure Discussion is that it should not be used under any circumstances. It creates a record of CRA contact without securing binding protection or an Effective Date of Disclosure.
Our Firm’s Approach
Our firm has acted for a client whose circumstances overlap substantially with what has been reported. The account below omits anything that would identify her.
The similarities are close. A young woman was recruited into the sex trade in Ontario shortly after turning eighteen by a handler who groomed her online. The handler imposed escalating earnings quotas, controlled her housing and transportation at marked-up rates, and diverted her earnings through fabricated investment arrangements that returned nothing. Critically, and as in the reported case, the handler took over the client’s financial identity. The handler created accounts in the client’s name but under the handler’s own control, incorporated a federal corporation naming the client as sole director and shareholder without her meaningful consent, and approached an accounting firm posing as the client’s assistant, supplying the handler’s own contact details in place of the client’s, so that personal and corporate tax returns were filed on the client’s behalf without her knowledge. The client had no access to her own CRA account and did not know what had been filed in her name. The handler was later arrested following a trafficking investigation in which financial intelligence was central.
The difference is the direction of the tax problem. In the reported case the trafficker pulled money out of the tax system by claiming benefits. In our client’s case the trafficker pushed a false picture into the tax system by filing returns that understated income. The remedies differ, but the underlying problem is identical: a CRA file created and controlled by the offender, with the victim left holding it.
Our approach was as follows:
We built the factual record before advancing any legal position, using police materials and bank records obtained under judicial production orders rather than relying on the client’s recollection. Coercion and identity theft arguments in tax matters fail when they rest on assertion alone. We then regained control of the client’s CRA account and obtained the full filing history, so that we knew what had actually been filed in her name before proposing to change any of it.
We had a forensic reconstruction of the financial picture prepared by an accounting firm retained for the purpose, working through both personal and corporate records to separate what the client actually retained from what was diverted to her handler. Only the retained portion was brought into income. We characterized the corporation as a bare trustee holding legal title only, supported by a bare trust agreement and by conduct consistent with that characterization from incorporation forward, so that the income and expenses flowing through the corporate account were reported on the client’s personal returns.
We dealt with the GST/HST exposure in the same submission rather than leaving it for later, since correcting income upward frequently triggers retroactive registration once the $30,000 small-supplier threshold is crossed, and the GST/HST liability is calculated on gross taxable supplies rather than net income.
We disclosed the existing CRA tax audit rather than working around it, explained why the issues in our submission fell outside its scope, and asked in the alternative for a discretionary exercise of relief on the overlapping amounts in light of the client’s circumstances. We requested a payment arrangement as part of the application rather than waiting for collections to make contact, and asked the CRA to confirm the Effective Date of Disclosure, to communicate with our office before making any adverse determination, and to give written reasons for any refusal or limitation of relief.
Finally, and most relevantly to the reported case, we advised the CRA officer in writing that the client was a victim of human trafficking known to police, with the police documentation attached, and asked that the file be handled by a CRA program equipped to deal with human trafficking victims. The file was transferred to specialized handling and the existing tax audit was held in abeyance. That outcome came from a written request with documentation attached, made to the officer with carriage of the file. It did not come from a phone call.
Takeaway
When a trafficker claims benefits in a survivor’s name, the resulting overpayment is recovered automatically by set-off against refunds, the Canada Child Benefit, and the GST/HST credit, without any court process and without anyone weighing the survivor’s circumstances along the way. Taxpayer relief under subsection 220(3.1) can remove interest and penalties but cannot cancel the principal. Cancelling the principal requires a remission order under subsection 23(2) of the Financial Administration Act, a route the Supreme Court has described as extraordinary and which is invisible from a CRA call centre.
The survivor’s leverage is documentary. The case law on pandemic benefit reviews shows that applicants succeed when the CRA officer failed to engage with evidence that was in front of him or her, and fail when the argument rests on hardship alone. Police records establishing that a survivor is a known victim of an offender who was charged do more work than any amount of explanation, and they are what moves a file from routine collections into specialized handling. Provincial coerced debt legislation will not touch a federal tax debt, so the CRA side has to be run as its own project.
Pro Tax Tips
- Establish the identity theft on paper before making any request. Obtain the police occurrence report, any charge or bail documentation, and any bank records showing that the benefit payments went to an account you did not control. Report the identity theft to the CRA through its identity theft process and keep the reference number. A confirmed identity theft file changes how everything downstream is handled, and it is worth doing before the substantive relief request rather than alongside it.
- Regain access to your own CRA account and obtain your complete filing and benefit history for every affected year. You cannot correct what you cannot see, and it is common for survivors to have no accurate picture of what was filed or claimed in their name until account access is restored. Expect this step to take time and to require identity verification documents that a trafficker may have withheld or destroyed.
- Understand which relief you are actually asking for before you file. If you want interest and penalties removed, that is a taxpayer relief application. If you want the benefit overpayment itself cancelled, that is a remission order request, and a taxpayer relief application will not get you there no matter how compelling the facts. Filing the wrong one costs months and can create an impression that the file has already been considered and refused.
- Put every piece of evidence in writing, in front of the officer who will decide, and keep proof that you did. The reported decisions show that where applicants have succeeded, it was because the officer failed to address evidence that was on the record. Evidence you mentioned only on a telephone call is evidence the Federal Court will never see, because judicial review is decided on the record that was before the decision-maker.
- Request a collections hold in writing on hardship grounds at the same time you make the substantive request, and renew it. Set-off against refunds and monthly benefit payments continues by default while a request is outstanding, and for a survivor on a fixed income that continuing recovery is often the most damaging part of the situation.
- Put the trafficking context in writing to the officer with carriage of the file, with supporting documentation attached, and ask expressly that the file be routed to CRA handling equipped for human trafficking victims. Explaining the situation verbally to a general agent will not accomplish this. The request needs to be written, documented, and directed at someone with authority to act on it.
- Diarize the thirty-day judicial review deadline in subsection 18.1(2) of the Federal Courts Act from the moment any adverse decision is communicated, even if you intend to pursue a second-level review first. Extensions are available but they are discretionary, and losing the right to review a refusal because a deadline slipped is an avoidable failure.
- Retain an experienced Canadian tax lawyer like those at our Toronto law firm rather than working through an accountant alone. Communications with a Canadian tax lawyer are protected by solicitor-client privilege while communications with an accountant are not, and in a file where a third party’s criminal conduct is central, that distinction matters. Where accounting reconstruction is required, the lawyer should retain the accountant.
Frequently Asked Questions
My trafficker claimed CERB in my name. Do I have to pay it back?
The CRA will treat it as your debt unless the entitlement determination is changed or the debt is remitted. The route is to establish the identity theft on documentary evidence, report it to the CRA, and pursue relief through the right channel. It will not resolve itself and it will not lapse.
Can the CRA take my Canada Child Benefit to pay it?
Yes. The Canada Child Benefit is delivered as a deemed overpayment of tax refunded monthly under subsection 122.61(1) of the Income Tax Act, and where an excess has been paid the CRA recovers it by reducing future monthly payments. The GST/HST credit is recovered the same way, and subsection 164(2) of the Income Tax Act and section 155 of the Financial Administration Act permit refunds to be applied against amounts owing.
Does the CRA need a court judgment to claw back my refund?
No. Recovery by set-off is administrative. That is why it can continue for years without any formal proceeding and without anyone assessing whether it is fair in your circumstances.
Will a taxpayer relief application cancel the debt?
No. Subsection 220(3.1) of the Income Tax Act, the basis of the CRA’s Taxpayer Relief Program (formerly the fairness provisions), permits the CRA to waive or cancel interest and penalties. It does not permit cancellation of the principal amount of a benefit overpayment. This is the most common and most costly misunderstanding in these files.
What can cancel the principal?
A remission order under subsection 23(2) of the Financial Administration Act. It is a Governor in Council decision, recommended on a ministerial recommendation, that a debt should be extinguished because collection is unreasonable or unjust or because remission is in the public interest. The Supreme Court described it in Collins Family Trust, 2022 SCC 26 as an extraordinary remedy granted in rare circumstances.
Has anyone ever succeeded in overturning a refused remission request?
Yes. In Mokrycke v. Canada (Attorney General), 2020 FC 1027, the Federal Court set aside the CRA’s refusal of a remission request and sent it back for redetermination, holding it unreasonable for the CRA to reject the request on the basis that no CRA error had been found at the tax audit stage when the tax audit itself was what the taxpayer was disputing, and faulting the CRA for not explaining why it dismissed the taxpayer’s extenuating-circumstances argument.
How long does a remission order request take?
Longer than most people expect. The application travels from the Tax Services Office Director to the Headquarters Remission Committee, then to the Assistant Commissioner and Commissioner, then to the responsible federal minister, and finally to the Governor in Council. The Supreme Court has adopted the description of this route as restrictive, uncertain, complex and slow. Our analysis of judicial review of a refused remission application sets out what happens next if it is denied.
Can I stop the clawbacks while I wait?
You can request a collections hold on financial hardship grounds. It must be requested in writing, it is discretionary, and it is not automatic. Nothing stops by itself simply because a relief request has been filed.
Does Ontario’s coerced debt legislation help?
Not with the CRA. Bill 41, the Protection from Coerced Debts Incurred in relation to Human Trafficking Act, addresses debts owed to consumer creditors. A federal tax or benefit debt is outside its scope, which is why survivors routinely clear their consumer debt and remain stuck on the CRA side.
The CRA will not meet with me. What do I do?
Stop working through the general enquiry lines. A written submission with documentary evidence attached, directed to the officer with carriage of the file, is what moves a file of this kind. A request that the file be routed to CRA handling equipped for human trafficking victims should be part of that submission.
What if the CRA refuses?
Request a second-level review by a different and more senior CRA official before doing anything else. It is faster and far cheaper than court and frequently succeeds where the first decision was made on an incomplete record.
What happens if the second-level review also fails?
The remedy is an application for judicial review in the Federal Court under section 18.1 of the Federal Courts Act, which must generally be brought within thirty days of the decision being communicated. It is not a trial. There are no witnesses and no new evidence, the case is decided on the record that was before the CRA decision-maker, and the Court will usually send the decision back to be remade rather than substitute its own answer.
What do the courts actually look for on judicial review?
Reasonableness, in the sense described in Vavilov, 2019 SCC 65: justification, transparency, and intelligibility. In practice, applicants have succeeded where the officer failed to engage with evidence before him or her. In Maheshwari, 2025 FC 1822 the Court found a decision unreasonable where the officer did not explain why a notice of assessment was dismissed, and in Moncada, 2023 FC 114 where the officer did not address invoices the CRA’s own guidelines identified as acceptable proof.
Can I argue that the CRA should have made an exception for my circumstances?
Not successfully, standing alone. In Flock v. Canada (Attorney General), 2022 FCA 187, the Federal Court of Appeal confirmed that the eligibility criteria are statutory and non-discretionary and that CRA officers have no power to grant relief on humanitarian grounds, a holding applied in Devi v. Canada (Attorney General), 2024 FC 33. The argument that works is not that your circumstances deserve an exception, but that you did not apply, did not receive the money, and were the victim of a documented offence.
I also have income from the trafficking period that was never reported. What about that?
That is a separate problem requiring a Voluntary Disclosures Program application under Information Circular IC00-1R7, and Memorandum 16-5-1 for GST/HST. It should be scoped and sequenced deliberately alongside the benefit overpayment issue, not merged into it.
Should I call the CRA first to see whether I qualify for the Voluntary Disclosures Program?
No. The CRA’s Pre-Disclosure Discussion creates a record of CRA contact without giving you binding protection or an Effective Date of Disclosure. Our firm’s position is that it should not be used under any circumstances. A Canadian tax lawyer can assess eligibility without any CRA contact at all.
Does an open CRA tax audit disqualify me from the Voluntary Disclosures Program?
Not necessarily. Voluntariness is assessed on an issue-specific basis rather than across your whole file, so issues outside the scope of an existing tax audit may still qualify as unprompted.
Is income I earned but never kept still taxable?
Not necessarily, as to the portion you never beneficially received. Where earnings were extracted under coercion so that you had no enjoyment of them, there is an argument that those amounts should not be included in your income. It is fact-specific and requires documentary support.
How long does a file like this take?
Realistically, many months before the CRA’s own processing even begins. Restoring CRA account access, assembling the police record, obtaining bank records, and preparing a documented written submission all take time. A remission order request takes considerably longer than that.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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