FORM RC4288E Request for taxpayer relief (Assorted Topics)

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FORM RC4288E Request for taxpayer relief (Assorted Topics)

Post by LTD4me on Fri 07 Mar 2014, 15:59

If you have been issued a T1198 form then you should be looking at filling out a request for taxpayer relief form, also know as a RC4288E.

It costs you nothing to fill it out and could potentially save you thousands of dollars

The reason for filling out this form is to contest the application of the notional interest used when CRA does recalculations based on your T1198

This Notional interest is a component used by CRA when calculating how much additional tax you would have been taxed on your retro income in the previous years as stated on your T1198

This Notional interest is also referred to as deemed tax or interest.

CRA uses this interest calculation to try and recoup interest for monies they did not receive in past years.

CRA states in the Income Tax Act that this calculated notional interest is not to be considered interest for any part of the Income Tax Act.

Because CRA don't want to call this notional interest what it really is ........and that is interest, they don't want to be held accountable for using it in their calculations.

I have taken the stance that since CRA does not want to call this interest i am calling it penalty.

Although it may not be construed as such in some cases, i feel it is in mine and many other vets case.

The tax act has provisions which allow the minister to wave interest or penalty under certain circumstances and for detailed reasons.

I have run with the intention of making this claim for taxpayer relief on the basis of the notional tax being a penalty not interest as one member here has already been denied for their claim of unfair interest and
CRA just came back and said it is not interest as stated in the tax act........crock of dog poo

So if you think you would like the chance to save potentially thousands of dollars fill out the RC4288E and submit it with your 2013 income tax return (cost you nothing and won't/can't hurt you)

I just recommend using the angle of calling it a penalty instead of interest.

Some points i have used in filling out the form (in my letter)

1). Minister, as authorized by Subsection 220(3.1) of the income tax act gives the Minister the discretionary authority to waive or cancel all or part of any penalty and interest otherwise payable by a taxpayer under the Act.

2). According to the Taxpayer Relief Provisions, "The Minister may grant relief from the application of penalty and interest where the following types of situations exist and justify a taxpayer’s inability to satisfy a tax obligation or requirement at issue:
(a) extraordinary circumstances

3). The Taxpayer relief Provisions also state that "penalties and interest may be waived or cancelled in whole or in part where they result from circumstances beyond a taxpayer’s control. Extraordinary circumstances that may have prevented a taxpayer from making a payment when due, filing a return on time, or otherwise complying with an obligation under the Act include, but are not limited to, the following examples: (here is where they give examples but pay attention to the part that says "not limited to " so just give your own examples.

4). I just went with this and after 4 pages of reasons why i felt it was extraordinary circumstances and out of my control i  figured it was time to stop and see what the tax man has to say

5). if it is denied you will have another chance to send in a second request, but at least you will have it submitted and on record in the event that anything comes up.

OK now what i put in the form

SECTION 2

1)
a) checked..... Penalty: cancellation or waiver........ reason "notional interest"
b) checked....... Interest: cancellation or waiver:...... reason  "notional interest"
c) no check
d) checked......Late, amended or revoked election:...reason  "Government of Canada delayed class action"

2 Reason(s):
check ......Other extraordinary circumstances:  then write as per enclosed letter (which is  a letter you write up indicating your grievances that are extraordinary circumstances and were out of your control)


I wont give all the reasons that i used in my request letter, as some people will just "cut and paste" on their request which would defeat the reason for this, I feel the more people that come up with their own reasons to fight this the more angles we will have as a group, and if someone does get granted relief hopefully they will then share how they got it with the rest of us.

Hope this clarifies and helps some, feel free to give input, actually i encourage it.

Best of Luck

regards

LTD4me


OK here is a sample


FEEL FREE TO COMMENT ON ANY OR ALL PARTS

As I am a  member of a class action law suit (federal court file number T-463-07), I have been authorized as described in the enclosed letter from Canada Revenue Agency, Legislative Policy and Regulatory Affairs Branch dated February 12, 2013 RE: Manuge Litigation, under paragraph "Qualifying Retroactive Lump-sum Payment, to file a T1198 form with my 2013 income tax return.

  I am in the belief that, for many legal and ethical reasons, the "interest calculated component" referred to as the notional interest, which reflects the delay in payment of tax on the retroactive lump sum payment, in the mechanism of calculating notional tax, should not apply, when the Canada Revenue Agency recalculates my taxes using the enclosed completed form T1198, which is based on being taxed in the year that the income in question should have been taxed.

I feel the Minister, as authorized by Subsection 220(3.1) of the income tax act gives the Minister the discretionary authority to waive or cancel all or part of any penalty and interest otherwise payable by a taxpayer under the Act. The request must be made within the 10-year time limit described" which in my case are between the years 2004 and 2013 inclusive.

   According to the Taxpayer Relief Provisions, "The Minister may grant relief from the application of penalty and interest where the following types of situations exist and justify a taxpayer’s inability to satisfy a tax obligation or requirement at issue:
(a) extraordinary circumstances
(b) actions of the CRA
(c) inability to pay or financial hardship"

I take note to the situation (a) extraordinary circumstances

The Taxpayer relief Provisions also state that "penalties and interest may be waived or cancelled in whole or in part where they result from circumstances beyond a taxpayer’s control. Extraordinary circumstances that may have prevented a taxpayer from making a payment when due, filing a return on time, or otherwise complying with an obligation under the Act include, but are not limited to, the following examples:
(a) natural or man-made disasters such as, flood or fire;
(b) civil disturbances or disruptions in services, such as a
postal strike;
(c) a serious illness or accident; or
(d) serious emotional or mental distress, such as death in
the immediate family"

I take note to the statement "but are not limited to the following examples"

  I believe the above provisions were designed to promote and provide fairness to taxpayers and after reading my reasons for taxpayer relief i am assured that if fairness is applied then tax relief should be granted.


  I submit that, the aforementioned statements should be taken into consideration when reviewing my request for taxpayer relief  for the following reasons

1). The oxford dictionary states the definition of the word  penalty as "A disadvantage suffered as the result of an action or situation"

2). I contend that the amount calculated under paragraph 120.31 (3) (b) of the Act, in particular the interest calculated portion or Deemed tax (notional interest) portion is calculated using a refund interest rate and according to the 1999 Department of Finance Technical notes which state's that the " notional amount of Interest... is not considered to be Interest for any purpose of the Act.". I on that basis, am of the view, that the amount determined in paragraph 120.31(3) (b) of the income tax act, is not Interest, and therefore by definition in the manor in which this NON interest is applied to the computation of the notional tax and  by means of being calculated in exactly the same manor in which an interest calculation would be made, must therefore be considered to be a penalty if not interest.

3). I was not in position of the said income, in the years in question.  it was beyond my control to make any calculations to include such income in said years taxes and therefore this in its self should warrant extraordinary circumstances.

4). The government of Canada which includes the Canada Revenue Agency, for XX years had all of my Gross offset income, all $XXX.XXX.XX of it. For XX years they were collecting interest on MY $XXX.XXX.XX. I assert that in essence the interest they received on my monies over XX years should have more than paid for any future notional interest calculation. This would be considered extraordinary circumstances by any means.

5). If I had actually received the offset in the years to which they related, I would have been taxed at a lower marginal rate. But because i did not receive the offset when i should have i have been disadvantaged by the notional tax calculation compared to other recipients who received  the same income with no offset in the same relevant years.

6). Because the Government of Canada decided to challenge the class action law suit, many years of litigation were incurred which made it beyond my control to claim or calculate any of the said taxable income.

7). I have a solid history of complying with all tax obligations.

Cool. My claim to the Minister to waive the penalties is in no way, to arbitrarily reduce or settle any tax debt but to correct and prevent a wrong, that will be done, if the notional interest is factored in on the recalculation of my previous 10 years income tax returns.

9). I argue that the intent of sections 110.2 and 120.31 of the Act is to provide relief to taxpayers by giving them the benefit of paying the lower of the two calculation methods fairly can not be accomplished fairly in my case. I insist the fact that it would not be in good faith to charge a notional interest on income that was never in my position for said calculations, therefore enabling the minister to waive the amount of penalty (notional interest) under authorization in the income tax act subsection 220 (3.1) of the Act"

10). On moral and ethical grounds if the minister can offer to waive penalty and fines to thousands of Ontario, Quebec and Atlantic province tax payers for delays in filing of their 2013 tax forms, just because of a few weeks of power outages, then it should be just as legally easy to accommodate a disabled veteran who served his country faithfully and with honor, who beyond his control did not pay taxes in the year that he should have, only because he never had the taxable income in those years.

For your consideration


Last edited by LTD4me on Wed 16 Apr 2014, 21:25; edited 1 time in total

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Re: FORM RC4288E Request for taxpayer relief (Assorted Topics)

Post by RobbieRoyal on Fri 07 Mar 2014, 16:36

Hey LTD4ME did you download the file from the cra web site
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Re: FORM RC4288E Request for taxpayer relief (Assorted Topics)

Post by Guest on Fri 07 Mar 2014, 16:37

yup I agree fully I fell I have to use the interest line as I believe if it came to a legal battle I think I could prove that deemed tax is in fact interest as it is applied and calculated the exact same way easier than I can prove its a penalty but like you said every different angle will help.

im wondering if you noticed at least the way ive been reading these acts, provisions and regulations that;

we because through no fault of our own have to pay deemed tax and have little to no chance for relief of this in the fairness provision.

a tax cheat pays a penalty and therefore has a much better chance of relief from that under the fairness provision than we do.

fairness provision my but.

just my opinion you are welcome to yours.

propat

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Re: FORM RC4288E Request for taxpayer relief (Assorted Topics)

Post by Guest on Fri 07 Mar 2014, 16:40


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Re: FORM RC4288E Request for taxpayer relief (Assorted Topics)

Post by LTD4me on Fri 07 Mar 2014, 17:01

Propat, you are correct the notional interest (deemed tax) is in fact interest at least to everyone but CRA, that's why I checked option b on section 2 of the RC4288 form just to cover my butt. I only went with the Penalty angle because I know for a fact (they have done it to another member here) that the CRA will only respond with "1999 Department of Finance Technical notes state's that the " notional amount of Interest... is not considered to be Interest for any purpose of the Act." basically they are saying although we calculate the notional amount of interest EXACTLY like anyone would calculate interest we deny calling it interest, hence we can not wave any interest since we did not calculate using interest. A bunch of legal mumbo jumbo just to cover their ass.

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Re: FORM RC4288E Request for taxpayer relief (Assorted Topics)

Post by Guest on Fri 07 Mar 2014, 17:04

I admirer your enthusiasm , and certainly respect what you believe in, however my own personal belief is that there is absolutely no chance that anyone of us will benefit from sending in the RC4288, I say this for the following two reasons :
1. I have completed, and filled my 2013 tax return, which included my retro, and I have not incurred and penalties whatsoever.
Therefor the CRA will deny our request for tax payer relief from our T1198 with respect to any notional interest that they may impose while doing the calculations, for this reason.
In other words, you are asking them for relief from the T1198, which is a completed form provided to us, over and above your already filled penalty free taxes.  

2. While doing the calculations with our T1198, and by adding interest, and or penalties to our retro, and it turns out that you owe more taxes, they will not ask you to pay any extra tax, therefor it is extremely difficult to obtain any sort of tax payer relief, when you have not been given any sort of direct penalty.
And remember this, you have already filled your taxes penalty free.

However like you have stated it cost nothing to send it in, and it certainly won't hurt, as I am sure some will disagree with my point of view in this matter, which is
perfectly fine by me, this is just the way I see it, and I think I am entitle to that, so no disrespect to those who do not see it my way.

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Re: FORM RC4288E Request for taxpayer relief (Assorted Topics)

Post by Guest on Fri 07 Mar 2014, 17:13

yes ltd I agee and yes that was call of duty he actually took them to court over this but could not finish I don't recall why I think it way lack of funds. but before he stopped he did have the judge saying after the deemed tax/interest arguments if it walks like a duck and talks like a duck well its a duck. so im thinking at least in a court battle this may be a better route as by the same legislation the interest portion of the QRLSP calculations are not considered penalties either but like you said you got two shots at this and im sure I will use both routs eventually.

always question authority

propat

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Re: FORM RC4288E Request for taxpayer relief (Assorted Topics)

Post by Guest on Fri 07 Mar 2014, 17:32

trooper I agree with most of that but for 2 points.

I think there is a small chance right off as they are taken on a case by case bacis.
plus if someone challenges the act in the near future because of this and wins you have the paperwork saying you applied.

point 2 you are claiming relief from deemed tax (on the form im using the words interest portion of the QRLSP for leagal reasons) these are real and large.

say for a guy getting over 400,000 retro with not a lot of taxable income in those retro years.

the 1198 will not help him so he can end up paying close to 200,000 on the 2013 instead of the close to 100,000 if the deemed tax were not charged that's around 100,000 frackin bucks.

if you think you have any chance whatsoever of putting that kind of coin back in your pocket don't you think you gotta take the ten minuets it takes and try.

and if you think this avenue exists to you don't you think someone should at least let you know so you can make your own decision.

propat

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Re: FORM RC4288E Request for taxpayer relief (Assorted Topics)

Post by LTD4me on Fri 07 Mar 2014, 17:35

Trooper

Just a few corrections from YOUR post

1) not asking for relief from the T1198 asking for relief from using the "notional interest mechanism" (all together different thing) which is used to calculate tax from the figures off the T1198

2)The intentions of the CRA when devising the qrlsp calculations was to impose a FAIR alternative to claiming income all in one year, i contend that the implication of the notional tax is not a fair assumption in our case.

3)It is obvious that whether you do your taxes calculated all in 2013 or using the alternative method (T1198 calculation) we will ONLY pay or get back which ever method is in OUR best interest. So if there is a way to make our best interest better it would be in my opinion be foolish not to try.

4) There are some people who will say yes we don't have to pay interest or penalty now so why worry about it, and they have the right to say that. What I and other people are trying to say is why not try to enhance our best interest tax wise if in any legal way possible, it it does not hurt your income tax return outcome what harm has been done in trying.

5) I challenge anyone to prove that filling out a RC4288 would be detrimental to us in ANY way shape or form.

6) The best analogy I can think of to filling out the RC4288 would be like buying a lottery ticket... you can't win if you don't play, just like you cant get any benefit if you don't fill out the form, the only difference would be you have to pay for the lottery ticket the RC4288 form is FREE to fill out.....

No disrespect intended, these are just an expression of my views and any of the long haulers here, know i have lots of views...


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Re: FORM RC4288E Request for taxpayer relief (Assorted Topics)

Post by Guest on Fri 07 Mar 2014, 18:04

propat, LTD4me, absolutely I am all for what you believe in, you are both fighters, and have both proved that you will not give up the fight, that's always Ok in my books
You both provide intelligence and determination with your post, and by the way, my hats off to both of you for showing such great dedication in helping out all members and guest of the forum. Please keep em coming.

My post was simply made as a personal view, it is just the way I see it, and yes if one feels that they can benefit from sending it in, by all means, go for it, I am not reflecting discouragement, at least that was not my intention, I was just speaking my mind, as I always do, no more than that.

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Re: FORM RC4288E Request for taxpayer relief (Assorted Topics)

Post by Guest on Fri 07 Mar 2014, 19:37

trooper in YOUR CORRECTIONS well I don't see any my whole plan for well over a year now was to seek relief from the deemed tax ive never here'd tell of seeking relief from an 1198 that's actually the first time ive hered that anywhere.

point 2 you belive no deemed tax will be allied in the 1198 that is in my mind a disagreement not a correction as I belive it will.

as for the rest its the same stuff ive been saying for well over a year.

propat


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Re: FORM RC4288E Request for taxpayer relief (Assorted Topics)

Post by Guest on Fri 07 Mar 2014, 19:55

propat, I posted what I believe, and that's as far at it goes, like I have stated at the end of my post, " This is just the way I see it, and I think I am entitle to that, so no disrespect to those who do not see it my way "








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Re: FORM RC4288E Request for taxpayer relief (Assorted Topics)

Post by LTD4me on Fri 07 Mar 2014, 20:03

Trooper no Disrespect taken actually i encourage you and everyone to voice their opinions, it is actually welcomed, everyone's opinion counts, as they say there is no I in team..... and together we are a team

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Re: FORM RC4288E Request for taxpayer relief (Assorted Topics)

Post by Guest on Fri 07 Mar 2014, 20:08

im in full agreement free speech is great aint it.

propat


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Re: FORM RC4288E Request for taxpayer relief (Assorted Topics)

Post by Guest on Fri 07 Mar 2014, 20:11

LTD4me, I agree with you 100%, this is what we are here for, we must welcome all points of views, as this makes for some good constructive discussions.
So I thank you for your post, and your help, as it is much appreciated.

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