by Jason Rosen

by Matthew Pollock

CRA ArticlesJanuary 16, 20250 comments

Protective Relief Requests with the CRA

Dealing with the Canada Revenue Agency (CRA) can be overwhelming, especially when faced with tax penalties and interest due to unforeseen circumstances. A Protective Relief Request offers a vital lifeline, allowing taxpayers to request relief from penalties and interest even when they may not have all the necessary documents or final details for a full Taxpayer Relief Application. By taking this step, you can preserve your ability to seek relief under the CRA’s Taxpayer Relief Program while you gather your supporting evidence or await a final resolution of a related issue.

This article explains will walk you through what a protective relief request is, when to use it, how to apply, and strategies for improving your chances of approval.

What is a Protective Relief Request?

A Protective Relief Request is a proactive measure taken by taxpayers who need relief from tax penalties or interest but are waiting for the resolution of a related tax issue.

It acts as a precautionary step to ensure that your case is considered within the CRA’s prescribed 10-year limitation period for taxpayer relief requests. Filing this request preserves your right to seek relief, even if you are not yet prepared to submit a full application.

When Should You File a Protective Relief Request?

A protective relief request is most useful in the following situations:

• Pending Tax Audits or Disputes: If you are currently under audit or waiting for the outcome of a tax objection, a protective relief request ensures you remain eligible for relief if penalties and interest are assessed later.
• Unresolved Financial Hardship: If you are experiencing financial difficulty but have not yet gathered all supporting documents, filing a protective request keeps your options open.
• Extraordinary Circumstances: If you were unable to meet tax obligations due to illness, natural disasters, or other exceptional circumstances, filing a protective request within the CRA’s timeline ensures your eligibility for relief.
• Delays from the CRA or Other Agencies: If you are waiting for responses from the CRA or another tax authority, a protective relief request prevents your case from being dismissed due to timing.

Types of Relief Available Through Protective Relief Requests

Protective relief requests fall under the CRA’s Taxpayer Relief Provisions, which allow the CRA to:

1. Waive or Cancel Penalties and Interest
   • If you were late in filing tax returns, making payments, or meeting reporting deadlines due to valid reasons, the CRA may cancel or reduce penalties and interest.
2. Accept Late or Amended Elections
   • If you missed a tax election deadline, you can apply for retroactive tax elections through a protective relief request.
3. Adjust a Tax Return Beyond Normal Reassessment Periods
   • Normally, the CRA limits reassessments to three years for individuals and four years for corporations. A protective relief request may allow adjustments beyond these timelines.

How to File a Protective Relief Request

To apply for relief, you cam submit Form RC4288 – Request for Taxpayer Relief to the CRA, along with supporting documents. Since protective relief requests are precautionary, the application may be less detailed than a standard relief request but should still include key information.

Your request should include:

• Your name, Social Insurance Number (SIN) or Business Number (BN).
• A clear explanation of why you are requesting relief.
• The specific tax years and amounts affected.
• The reason for the delay in submitting a full request.

Even if you do not have all supporting documents at the time of submission, your request should include:

• A summary of the circumstances leading to penalties or interest.
• A timeline of key events affecting your ability to meet tax obligations.
• Any initial supporting documents, such as medical records, legal documents, or correspondence with the CRA.

Since this is a protective relief request, explicitly mention that the full supporting documentation will follow once additional information is available. The CRA may place the request on hold or ask for further details later.

You can send the completed Form RC4288 and any supporting documents via:

• Mail to the designated CRA Tax Centre for your province;
• Fax; or
• Online through My Account or My Business Account on the CRA website.

Common Mistakes to Avoid When Filing a Protective Relief Request

1. Waiting Too Long
   • The CRA only accepts taxpayer relief requests for amounts within the last 10 years. Filing a protective request before the end of the year ensures eligibility. For instance, if your tax dispute pertains to the 2015 year, you must file for protective relief before December 31, 2025 in order to preserve your rights.
2. Not Providing Enough Information
   • Even though this is a preliminary request, providing a strong justification increases your chances of eventual approval.
3. Assuming the CRA Will Automatically Grant Relief
   • Protective relief requests do not guarantee approval. It is crucial to follow up with a full application when ready.
4. Ignoring CRA Follow-Ups
   • The CRA may request additional documentation. Respond promptly to avoid delays or rejection.

How Long Does the CRA Take to Process Protective Relief Requests?

Processing times vary depending on the complexity of the request and the CRA’s workload. Generally, taxpayers can expect:

• 6 to 12 months for a response.
• Additional time if the CRA requires further documentation.

What to Do If Your Protective Relief Request is Denied

If the CRA denies your request, you still have options:

1. Request a Secondary Review: If you believe the CRA made an error or failed to consider key evidence, you can request a reconsideration.
2. Consult a Tax Lawyer: A tax lawyer can strengthen your case and guide you through the appeals process.

How a Tax Lawyer Can Help with Protective Relief Requests

The CRA’s taxpayer relief process can be complex, and errors in your application may reduce your chances of success. A tax lawyer can help by:

• Drafting a compelling protective relief request that aligns with CRA guidelines.
• Ensuring all deadlines are met to preserve your rights.
• Gathering strong supporting documents to justify your claim.
• Negotiating with the CRA to maximize your relief.

If you are dealing with tax penalties and interest but need time to finalize your application, filing a Protective Relief Request can safeguard your ability to seek relief later. To improve your chances of success and avoid costly mistakes, consult a tax lawyer who specializes in CRA disputes.

Schedule a free consultation with Rosen & Associates Tax Law today to explore your options for taxpayer relief.

***Disclaimer: This article provides information of a general nature only. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in this article. If you have specific legal questions, you should consult a lawyer.