Recovery of Late Filing Penalties

Published on 4:37 pm by in Taxation

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Even centres with excellent financial controls are sometimes late paying their monthly remittances to the Receiver General and/or filing T4 and T4A Summaries at year end. Penalties are generally between 10% and 20% for late payment of remittances and $200 for late filing of T4 and T4A Summaries. Childcare centres generally cannot afford such penalties. Not-for-profit centres (including registered charities) can appeal the imposition of penalties with the Appeals Division of Revenue Canada. In our experience appeals from not-for-profit organizations are almost always granted. Your centre should request relief by filing a form RC4288. See: http://www.cra-arc.gc.ca/E/pbg/tf/rc4288/README.html

The letter should include:

  • state that you provide childcare services, that the organization is run by a volunteer Board of Directors not remunerated for their time and effort, and that resources are scarce in this time of fiscal restraint.
  • request for a waiver of any penalties. Include a copy of the Notice of Assessment from Revenue Canada setting out the amount owing.
  • note why the remittance/forms were filed late (generally oversight resulting from over-work).
  • explain that large late filing penalties will have a serious negative financial impact on your operation.

You should hear from Revenue Canada within three months and hopefully your appeal will be accepted.

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