CRA reassesses each transaction in a series of transactions independently of each other, resulting in larger total assessments than could be justified on any logically consistent basis and so that it is impossible for the taxpayer to pay the total tax. Would the impossibility of paying the full amount of the tax, combined with the fact that only one of the reassessments, at most, can be correct, give rise to a waiver of interest? CRA stated:
…As discussed in...IC07-1...CRA may provide interest and penalty relief in situations where a taxpayer has a confirmed inability to pay or is experiencing financial hardship related to the balance owed to the CRA.
For an individual taxpayer, financial hardship refers to the financial difficulty that the payment of arrears would cause a taxpayer in being able to provide for reasonable basic living requirements, such as food, medical, shelter or transportation. For a corporate taxpayer, financial hardship refers to situations where the continuity of business operations, the continued employment of the employees, and welfare of the community as a whole would be in jeopardy.
Interest relief may also be provided in circumstances where a taxpayer has made bona fide efforts to pay the balance owed; however, substantial additional interest charges would absorb a significant portion of their payments making it extremely difficult, if not impossible, for a taxpayer to resolve their account within a reasonable amount of time. …