Bozzer Wins! More Interest Relief Available Under Fairness Provisions

On June 2, 2011, the Federal Court of Appeal released its decision in Bozzer v. Minister of National Revenue, in which the court rejected a long-standing position of the Canada Revenue Agency (the "CRA") restricting the circumstances in which applications for administrative relief from interest accruing on tax debts may be considered by the Minister of National Revenue (the "Minister").

Subsection 220(3.1) of the Income Tax Act (Canada) (the "Act") provides that the Minister may waive or cancel all or any portion of any penalty or interest otherwise payable under the Act by a taxpayer.  However, the subsection also provides that the Minister may only grant such relief "on or before the day that is ten calendar years after the end of a taxation year of a taxpayer".  Applications by taxpayers for relief from interest under subsection 220(3.1) of the Act are frequently referred to as "fairness applications" or "taxpayer relief applications".