If you’re a realtor and just received a CRA late filing notice letter, don’t panic—but don’t ignore it either. Late tax filings can lead to penalties, interest charges, and even a deeper review of your finances. The good news? You can take action now to minimize the damage.
Here are five steps you need to take immediately to get back on track and avoid further headaches.
1. Read the Letter Carefully—What Does the CRA Want?
The CRA sends different types of late filing notices, so the first step is to understand exactly what they’re asking for.
Common reasons for a CRA late filing notice:
- You missed the personal tax deadline (April 30 for most, June 15 for self-employed).
- Your corporation tax return is overdue (if you run a PREC).
- You failed to file or pay GST/HST on time.
- The CRA believes there’s a discrepancy in your tax records.
Check the deadline the CRA has given you to respond. Acting quickly can reduce penalties and prevent further action.
2. File Your Tax Return ASAP (Even If You Can’t Pay Yet)
If you missed the filing deadline, the CRA applies an automatic late filing penalty of 5% of your balance owing, plus 1% per month (up to 12 months). If you were also late in any of the last three years, the penalty jumps to 10% plus 2% per month.
Filing your return immediately stops the late filing penalty from growing.
How to file quickly:
✅ Use CRA My Account or NETFILE to submit online.
✅ Work with an accountant to ensure accuracy.
✅ If you already filed but received the notice by mistake, check with the CRA to confirm they received your return.
Even if you can’t pay the full amount, filing stops further penalties from increasing.
3. Make a Payment (Even a Partial One)
The CRA charges daily compound interest on unpaid taxes, meaning your balance keeps growing the longer you wait.
How to make a payment fast:
- Online banking – Add the CRA as a payee.
- CRA My Payment – Pay instantly through the CRA website.
- Pre-Authorized Debit – Set up automatic payments.
- Cheque or money order – Mail your payment with your tax details.
Even if you can’t pay in full, send what you can. This reduces interest and shows the CRA you’re taking responsibility.
4. Contact the CRA to Set Up a Payment Plan (If Needed)
If you can’t afford to pay the full amount right away, the CRA offers payment arrangements. You can spread out payments over several months, avoiding collection actions.
How to request a payment plan:
- Call the CRA Collections Department at 1-888-863-8657.
- Use CRA My Account to set up a payment arrangement.
- Be ready to explain your financial situation and offer a realistic payment schedule.
The CRA is more likely to accept a reasonable plan if you show an effort to pay.
5. Request Penalty Relief If You Have a Good Reason
If you had a valid reason for missing the deadline, you might qualify for taxpayer relief. The CRA may reduce or cancel penalties and interest in certain situations.
You may qualify if you experienced:
- Serious illness or medical emergency
- Death in the family
- Natural disasters (floods, wildfires, etc.)
- Financial hardship (e.g., sudden income loss)
To apply, complete Form RC4288 – Request for Taxpayer Relief and include proof of your circumstances (e.g., medical records, financial statements). Approval isn’t guaranteed, but it’s worth trying.
Key Takeaways
- Filing late results in penalties and interest—act fast to minimize costs.
- File your tax return ASAP to stop the late filing penalty from increasing.
- Make a payment, even a small one, to reduce interest charges.
- Set up a payment plan if you can’t pay in full.
- Request penalty relief if you had a valid reason for missing the deadline.
If you’re struggling with a CRA late filing notice, don’t wait until it gets worse. Contact us today for expert tax support and make sure your real estate business stays on track!
