This article has 14 comments

  1. Re-written for clarity:

    (1) If an individual would otherwise be liable to pay a tax under this Part because of section 207.02 or 207.03, the Minister may waive or cancel all or part of the liability if

    (a) the individual establishes to the satisfaction of the Minister that the liability arose as a consequence of the individual being a complete and utter moron who cannot understand basic english, and was wilfully blind in not spending a few minutes to go to the Canada Revenue Agency website and read the rules; and

  2. How to send the request for the waiver?
    1. T400A with a cheque
    2. T400A without a cheque
    3. A letter with the cheque
    4. A letter without a check

    And who we should send the request to?

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  4. Ellen Roseman has an article in the Toronto Star (–roseman-who-s-to-blame-for-costly-errors-in-tax-free-accounts) where she refers to an individual who contributed $21,000 to her TFSA thinking that the first $5,000 would be tax free. Clearly, people do not read the rules and put blind faith in others to have their best interests at heart.
    Under (b) above, wouldn’t that mean the person has to withdraw the excess contribution as soon as they could? If I put $5,000 into a TFSA at ING in January, but was then offered a better rate at BMO on new TFSA’s (not transfers from other institutions), and I took my money out and put it in a BMO account in February, I’d have to witdraw it in March to apply for relief under (b). What’s more confusing? That or the TFSA rules? I’d go with the former.

  5. Thanks… a very helpful link and info.

  6. Canadian Capitalist

    @KBE: Depending on the source, I’m hearing (1) or (3). If it were me, I’d call CRA and do what they suggest. If I were in this situation, I would (and I should note here that I’m not an accountant or tax professional):

    (1) Send the cheque for the excess TFSA amount penalty.
    (2) File a Request for Taxpayer relief (Form RC 4288). In it I’ll ask for a waiver under 207.06. I’ll point out why the penalty arose because of a reasonable error and document the steps I’ve taken to rectify it.

    PS: I’d love to hear comments from tax experts.

  7. Oh great , can i use this if i didn’t get my gross up right or the T5 or T5008 was wrong or some other CRA rule?

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  13. This was obviously going to happen as the governments own website said in non-ambiguous terms that a TFSA account could be used the same was a regular savings account.

    It was only the CCRA website that was clear on how the contribution amounts worked.