We’ve talked before about TFSA over contributions, see Here. But this weeks story is one of forgiveness from CRA, and it comes to us from our very own staff member’s daughter. She had mistakenly over contributed to her TFSA, something that happened due to automatic withdrawls that she was unaware of. When CRA found out, they slapped her with a $1,200 penalty! CRA states that TFSA over contributions are penalized at a rate of 1% per month, so it adds up quickly.
Instead of ho-humming and just paying the fine, she wrote a letter to CRA explaining the situation, about how it was an honest mistake and wouldn’t happen again. After a few weeks she got a notice in the mail from them, the charge was reversed! Quite a surprising result, especially with such a quick turnaround (we often wait 6 months or more for issues to get resolved).
So take note, if you feel you made a mistake that CRA is assessing a penalty on, don’t just accept it! Send them a letter explaining the situation, you just might be off the hook if you word it properly.