The Last Day to Ask CRA to Cancel 2016 Penalties and Interest Is December 31, 2026

Oct 5

Written By Elias .

Short answer: If you were charged penalties on a 2016 tax return or GST/HST filing, or interest that built up during 2016 on any tax debt, you have until December 31, 2026 to ask the Canada Revenue Agency (CRA) to cancel it. After that date, CRA has no legal authority to grant relief for 2016, however strong your reasons.

What is taxpayer relief?

Taxpayer relief lets CRA cancel or waive penalties and interest that were correctly charged, when you couldn't meet your tax obligations for reasons beyond your control. The power comes from section 220(3.1) of the Income Tax Act and, for GST/HST, section 281.1 of the Excise Tax Act.

Taxpayer relief does not reduce the tax itself. It only addresses the penalties and interest on top of it. For many people, those add-ons have grown larger than the original debt.

Why the deadline matters

Taxpayer relief runs on a ten-year rolling window. You must send a request within 10 years from the end of the calendar year or fiscal period in question. The window rolls forward every January 1, so each year an older tax year drops off permanently.

CRA publicly flagged last year's deadline: taxpayers had until December 31, 2025 to request relief for the 2015 tax year or reporting period. The same rule now applies to 2016.

The deadline covers three things:

penalties on your 2016 tax year;
penalties on any GST/HST reporting period that ended in 2016; and
interest that accrued during 2016, whatever year the original debt came from.

Interest relief reaches further than most people think

The rules for penalties and interest are different, and the difference is often valuable.

Penalties can only be cancelled for tax years that ended within the last ten calendar years.

Interest can be cancelled for the ten years before your request, no matter how old the debt is. CRA may cancel interest and penalties that accrued within the 10 calendar years before your request, regardless of when the debt originated. This follows the Federal Court of Appeal's decision in Bozzer v. Canada, 2011 FCA 186.

Who qualifies?

CRA's guidance (Information Circular IC07-1R1) identifies three main situations where relief may be appropriate:

Extraordinary circumstances. Serious illness, a death in the family, a natural disaster, or a similar event that stopped you from filing or paying on time.
Actions of CRA. Processing delays, incorrect information from CRA, errors in CRA publications, or delays that let interest build up.
Inability to pay or financial hardship. Where paying the full interest would leave you unable to meet basic living expenses. Relief here is usually limited to interest, often in connection with a payment arrangement.

The list is not exhaustive. CRA has said relief may be granted even where the situation does not fit neatly into one of these categories. However, the decision is discretionary, and CRA is not required to grant relief.

What a strong request includes

Relief requests succeed or fail on the record. In practice, the evidence you file at the first stage is the evidence that will be judged later. A strong request generally includes:

the specific years, periods and amounts you want cancelled;
a clear, dated account of what happened and how it caused the penalty or the delay;
documents proving it, such as medical records, death certificates, correspondence with CRA, or bank and expense records for hardship requests; and
an explanation of what you did to comply once the circumstances changed.

You can apply using Form RC4288 or by letter, online through My Account or Represent a Client, or by mail. CRA aims to decide requests within 180 calendar days, though it has reported higher-than-normal volumes.

If you are still disputing the tax

If you have an ongoing objection or appeal, CRA may hold your relief request until the dispute ends. That does not stop the ten-year clock. If the dispute might outlast the deadline, a protective request filed before December 31 preserves your right to ask for relief later.

If CRA says no

A denial may not be the end. You can ask for a second administrative review by a different CRA officer. If that is also denied, the decision can be challenged in the Federal Court through judicial review, which must be filed within 30 days of the decision.

A note on COVID benefit debts

Taxpayer relief does not apply to CERB or CRB repayment demands. Those debts carry no interest or penalties under their governing legislation, so there is nothing for taxpayer relief to cancel. Benefit overpayments are handled under separate rules.

Checklist before December 31, 2026

Do you have penalties on a 2016 return or a 2016 GST/HST period?
Has interest been accruing on any tax debt since 2016 or earlier?
Did illness, hardship, a CRA error or another event outside your control contribute?
Can you document it?
Is there an open objection or appeal that calls for a protective filing?

If you answered yes to any of these, act this fall rather than in the last week of December.

How ZAF LAW can help

ZAF LAW focuses on CRA taxpayer relief requests and COVID benefit debt disputes for individuals in Ontario. We offer a fixed-fee relief opinion ($750 + HST) that tells you whether a request is worth filing, what it should claim, and what evidence you need. Our fixed fees for preparing first and second review requests are available on request. We respond to new inquiries the same business day.

Book a consultation with ZAF LAW

This article provides general information only and is not legal advice. Reading it does not create a lawyer-client relationship. The law and CRA practice change; this article is current as of October 2026. For advice on your situation, consult a lawyer.

Elias Zafiridis is an Ontario lawyer whose practice focuses on tax disputes with the Canada Revenue Agency. He has appeared before the Tax Court of Canada and has written on tax for Thomson Reuters Taxnet Pro, Investment Executive and Law360 Canada.