This year has been a challenging one for most Canadians. Restrictions continued to evolve and business and individuals, across different provinces, are being impacted.

The measures put into place to curb the spread of the COVID-19 pandemic have resulted in job losses and financial distress for many. Even though the government launched multiple programs to support Canadians, debt has continued to accumulate for many.

While collection action was temporarily halted during the early months of the pandemic, the CRA has now resumed some of its compliance, audit, and collections programs.

This blog helps answer the most frequently asked questions about personal income tax debt collection so that you can be more prepared when it comes to managing and paying off the tax debt.

1. Has the tax debt collection resumed?

Yes, as of September 2020, the CRA has resumed its debt collection activities.

CRA officials are reconnecting with taxpayers to discuss outstanding payments, gauge their financial standing, and work out payment arrangements, where possible.

2. Will I receive a call from the CRA?

Yes, you will be contacted over the phone or via mail. Collections officers or agents from the debt management call centre will be informing you about the balance you owe and evaluating your financial situation.

3. What can CRA do if I don’t pay my tax liability?

While no legal actions are being taken (at this point), it is good to know about what actions can CRA take if debts are not repaid in a timely manner.

Usually, the CRA sends you the notice of assessment or reassessment by mail and waits for 90 days before taking legal action.

Though, when CRA proceeds with collection action, it will take an aggressive approach. To get the payment, CRA can seize your bank account, garnish your wages and even register a lien on your property.

4. How should I deal with a CRA collections agent?

The CRA is known to take a tougher approach than any other agencies. Hence, it is usually more difficult to negotiate favourable terms of payment with the agency.

Collection officers get you to complete a financial disclosure form and once they have the information, they can use it to take actions such as garnishing your wages. Hence, we don’t ever recommend trying to negotiate with the CRA directly.

To avoid weakening your case and to negotiate properly, it is important to approach them represented.

5. How can an experienced debt consultant help?

When you get notified about your tax debt, reach out to a debt consultant. Debt consultants have years of experience in dealing with CRA and have long-standing partnerships with industry peers.

An experienced debt consultant can help negotiate a payment arrangement that works for you and the tax department collections agent. If you reach out to a debt consultant as soon as you are notified by the CRA, you can also avoid collection action.

No matter what your situation is, they enable you to analyze all of your options, discuss various strategies for repayment, and bring together the resources you need to resolve your debt issues.

At DebtCare, we work with you to create an action plan that not only reduces but ultimately eliminates your debt.

Contact us today to learn about one of the only programs that can resolve a CRA back tax problem and get a free consultation. Call us on 1-888-890-0888 or visit www.debtcare.ca.