Scott v The
Queen–
Cancelled Arrears Interest Reduces the Tax liability of
both Transferor & Transferee under the Income Tax Act (Section
160)
Introduction – Relief from Arrears Interest
& Section 160 Third Party Assessments
Under Canada's Tax Act, the Canada Revenue Agency
("CRA") may grant relief from penalties or interest where
circumstances beyond the taxpayer's control prevented him or
her from meeting their tax obligations. These circumstances may
include, but are not limited to, extraordinary circumstances,
actions of the CRA, inability to pay and financial hardship. In
such cases, taxpayers must make a request to the CRA for taxpayer
relief to cancel or
waive penalties or interest. This is referred to as taxpayer
relief or TPR application. The CRA's power to grant relief from
penalties or interest is discretionary and arises under sections
220, 164 and 220 of the Income Tax Act. In determining whether to
grant relief (or not), the CRA will consider
