Taxpayer Rights - Leniency For Undue Hardship

• Undue hardship relating to the requirement for withholding taxes on salary, wages or other remuneration, superannuation or pension benefits, retiring allowances, death benefits, annuity payments, payments out of a registered pension plan, registered retirement income fund, registered education savings plan or government assistance, etc., it is possible for a taxpayer to request a reduction in withholding. This is done on Form T1213 Request to Reduce Tax Deductions at Source for Year(s) ____ and the request is considered on a case-by-case basis by CRA. Reasons can include unusual medical expenses or charitable donations or other deductions otherwise allowable to reduce net or taxable income resulting in a refund at the end of the year.
• A taxpayer also has the right to increase tax withholding if their income sources do not have enough withheld, resulting in a balance due at the end of the year. An example of this may be a request to have increased taxes withheld from Canada Pension Plan benefits.
• The Minister is allowed to refund excessive instalment amounts paid by the taxpayer, if the Minister is satisfied that the overpaid instalments will cause undue hardship. The amount to be refunded is left to the discretion of the Minister.
• Non-resident actors are required to pay a withholding tax to Canada. The Minister may require a lesser amount if it can be shown that the required amount will cause undue hardship.
• It is possible for the Minister to grant a reduction in security to be posted due to the Departure from Canada if the taxpayer can prove undue hardship

Join us next time when will discuss the following:

• Right to Offset Interest Income.
• Employer's Right to Reduce Payroll Penalties
• Directors' Right to Limit Liability.