Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
As requested in your memorandum of August 31, we confirm that it has been the practice of the Department not to remit interest payable on taxes assessed except for interest related to an amount of tax that was remitted.
The basis for this position is as follows:
- (1) The Financial Administration Act refers only to the remission of "tax, fee or penalty" in section 23.
- (2) Based on an informal legal opinion obtained some 15 years ago, it was indicated that there was legal support for the view that interest could properly be considered as a "tax" for purposes of section 17 (now 23) of the F.A.A.
- (3) Since in economic terms interest charges can be considered to be compensation payable by the taxpayer to the government for use of funds that are rightfully the government's once a tax debt becomes due, collection of interest charges was not considered an unfair burden to a taxpayer in cases "here it was accepted that the tax debt upon which it was based was legitimate.
Although this practice will continue to be applied, it "as drawn to our attention in a letter dated August 3, 1979 from the Director of the Toronto District Office that we have in fact remitted unrelated interest as recently as 1983. At the present time this whole matter is under review and will probably involve a formal request for a legal opinion on the subject. It should be noted that the 1983 case referred to was an extreme hardship case and other cases cited may also be in the same category.
In view of the review in progress, you may wish to delay finalization of the request for remission. If a delay is not appropriate we would suggest that the third item cited above be given as support for denial of the request.
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© Her Majesty the Queen in Right of Canada, 1989
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© Sa Majesté la Reine du Chef du Canada, 1989
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