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Category: CRA tax debt

  • 2019 Tax Deadline Around the Corner – Let’s Review Current Penalties and Interest

    The Canada Revenue Agency (CRA) tax deadline for the 2019 tax year is coming up quickly. Are you prepared?

    The deadline to file your 2019 income tax is April 30, 2020.

    For self-employed tax filers, the deadline is June 15, 2020, however, it’s better to file by April 30 as you will be charged interest from May 1 to June 15.

    It’s critical to meet the CRA filing deadline to avoid late-filing penalties, interest, and collection action — even if you can’t pay.

    Here’s what you need to know about the 2019 tax filing deadline:

    CRA Interest

    One reason why you want to file on time and pay what you owe in full (or look into alternative options) is to avoid CRA interest charges.

    If you have a balance owing for 2019 and don’t pay it in full, the CRA can begin charging you daily compound interest on May 1, 2020. This includes any balance owing if the CRA reassesses your return.

    If you are charged penalties, such as a late-filing penalty, the CRA can also charge interest on this amount.

    If you have amounts owing from previous years, the CRA will continue to charge daily compound interest on those, too.

    CRA interest rates change every three months.

    CRA Late-Filing Penalty

    If you owe money to the CRA and miss the tax filing deadline of April 30, 2020 (or June 15, 2020 for sole proprietors) you can be charged a late-filing penalty.

    In 2019, this penalty was 5% of your 2018 balance owing, plus 1% of your balance owing for each full month your return is late, up to a maximum of 12 months.

    If you’ve been charged a late-filing penalty in the past three years, you could be charged even more for missing the April 30, 2020 deadline — 10% of your balance owing, plus 2% of your balance for each full month your return is late, up to a maximum of 20 months.

    This is why, even if you can’t pay your full balance, it’s still best to file your return on time.

    Repeated Failure to Report Income Penalty

    If you failed to report an amount on your return for the 2019 tax year and you also failed to report an amount on your return for 2016, 2017, or 2018, you may be charged a repeated failure to report income penalty.

    If you did not report an amount of income of $500 or more for a tax year, it will be considered a failure to report income.

    The federal and provincial or territorial penalties are each equal to the lesser of:

    • 10% of the amount you failed to report on your return for 2019.
    • 50% of the difference between the understated tax (and/or overstated credits) related to the amount you failed to report and the amount of tax withheld related to the amount you failed to report.

    In some cases, if you voluntarily tell the CRA about an amount you failed to report, the CRA may waive these penalties. However, if you choose to go this route it is better to do so with an advocate on your side (like DebtCare!).

    False Statements or Omissions Penalty

    If you knowingly make a false statement or omission, or do so through gross negligence, you could be charged a penalty equal to the greater of:

    • $100
    • 50% of the understated tax and/or the overstated credits

    Again, in some cases, you can voluntarily tell the CRA about a false statement or omission and have the penalty waived. Again, it’s best to consult a debt counsellor first, such as DebtCare, before negotiating with the CRA.

    What To Do If You Owe Taxes But Can’t Pay

    As we’ve mentioned, if you know you will owe but can’t pay, it’s still important to file before the April 30, 2020 tax deadline.

    Don’t just hope that it will be overlooked or go away on its own – it won’t, and you’ll end up accruing more interest and penalties. In some cases, the CRA will waive the penalties or interest, but you will still owe the principal amount.

    Instead, make a plan for how you will pay what you owe.

    This could look like:

    • Making room in your budget to find the amount owing.
    • Taking out a personal loan that you can repay over a longer period and using the money to pay the CRA.
    • Consolidating debt.
    • Refinancing your mortgage.
    • And more.

    If you truly cannot pay, nor can you access a personal or debt consolidation loan, you can stop CRA collection action by filing for bankruptcy or for a consumer proposal.

    Get A Head Start By Contacting a Debt Counsellor

    At DebtCare Canada, we provide access to one of the only programs that can resolve a CRA back tax problem.

    Whether it’s personal income tax, HST, or payroll, DebtCare Canada can help! Get ahead of your tax problem. Reach out to us for a free consultation by calling 1-888-890-0888 or learn more about our CRA Tax Debt program at https://debtcare.ca/back-taxes/.

  • CRA Auditing PayPal Business Recipients — What to Do If They Have Come After You

    Business owners, have you received income using PayPal? If so, the Canada Revenue Agency (CRA) may be contacting you for an audit.

    In November of 2017, PayPal was served with a Federal Court of Canada order to submit specific information to the CRA about PayPal Business account holders.

    PayPal had to give the CRA account details for businesses that sent or received payment via the service between January 1, 2014 and November 10, 2017.

    What does this mean for you?

    • If you’re a business that doesn’t use PayPal, you won’t be affected.
    • If you’re a business that has a PayPal Business account and used it for transactions between the above dates, you might be facing an audit.

    With the information from PayPal, the CRA is looking for business income that was not reported in annual filings.

    If you reported all of your income, including any from PayPal, and can prove it, then the audit would proceed as normal.

    But what if you received income via PayPal, but didn’t report it? That’s a different matter.

    If your business is audited and you know that you will owe, then you need to get a financial plan in place. Don’t ignore the problem!

    The CRA cares less about the fact that you didn’t report all of your income and more about closing their file. They can’t close their file if they don’t collect from you.

    If they can’t collect from you, they will turn to collection action – like a frozen bank account or issuing requirement to pay notices to your clients. This is why it’s best not to ignore the situation.

    Having a plan means putting measures in place to protect yourself once the debt is determined. One of the most important measures is figuring out how you will pay what you owe – or what you will do if you cannot pay.

    How to pay the CRA what you owe and stop collection action:

    • Pay the amount in full if you have the funds available.

    If you don’t have the funds available…

    In general, it is better to owe another financial agency than it is to owe the CRA. The CRA can take swift collection action with devastating consequences – and they are not required to give you notice.

    • If possible, consider taking out a loan to pay the CRA what you owe. Then pay back the other loan over a fixed schedule.
    • If you can’t take out a loan, can you refinance your mortgage?

    If you can’t take out a loan, refinance, or otherwise find the funds…

    • Negotiate with the CRA. In some cases, the CRA will agree to a payment schedule with you. However, this is a risky move and could further expose your business to collection action. And even in the best-case scenario, you will still owe the CRA – they will want their payment in full.
    • Part of their negotiation plan may still be to collect – such as sending out requirement to pay notices to business clients, which could harm your reputation.

    If negotiation isn’t viable…

    • File for a consumer proposal or bankruptcy.

    If you can’t pay in full, find the funds, or make an agreement, filing for insolvency will immediately stop CRA collection action. For many businesses, this is a far preferable alternative than having the CRA issue requirement to pay notices or freezing your bank account.

    The Bottom Line

    Whether your business is being audited by the CRA for a PayPal Business account or another reason, if you are found to owe and you can’t pay, you need a plan.

    Ignoring it won’t make the problem go away – and, in fact, will make it worse through collection action that can harm your finances and your reputation.

    When dealing with the CRA, it’s best to have an advocate on your side. At DebtCare Canada, we’ve helped thousands of Canadians deal with problem debt, including CRA tax debt. We offer access to one of the only programs that can resolve a CRA back tax problem.

    Contact us today to make a plan for your CRA business audit. Call 1-888-890-0888 or visit https://debtcare.ca/back-taxes/.

  • How to Save Your Home During a Financial Crisis

    In a financial crisis, all of your assets may be in jeopardy – especially your home.

    A financial crisis can take many forms: an unexpected bill, change in interest rates, job loss, buildup of long-term debt, and more. But one of the hardest to deal with — and most critical – is a CRA tax debt.

    When you owe the Canada Revenue Agency (CRA) money, they can act swiftly and aggressively. The CRA has many debt collection tools in their arsenal, including putting a lien on your house.

    Particularly in cases of tax debt, many folks freeze and don’t know what to do.

    This is mistake! When it comes to a financial crisis — especially a tax debt – time is not your friend. A lien on your house is game over.

    When there is a financial crisis, saving your home means acting fast.

    The first step is to determine your home equity position. A good financial advisor will be able to access an automated valuation model (AVM) to calculate the actual quick sale market value of your home against what you owe.

    The next step is knowing ALL of your financial options and considering the pros and cons of each.

    Option 1: Refinancing Your Home

    Pros: Can deal with your financial crisis without affecting your credit score.

    Cons: The viability depends on the equity available in your home. It isn’t always a long-term solution.

    When evaluating refinancing your mortgage, ask:

    • Do you have enough equity in your home to refinance?
    • If you do refinance, is it just a band-aid solution or does it fully resolve the issue?

    Sometimes people will refinance their homes to quickly deal with the issue at hand, but it doesn’t resolve the long-term one. So, a financial crisis is still looming, but they will not have equity to deal with it the next time it becomes urgent.

    If refinancing is not a long-term solution, there are other options available.

    Option 2: Filing for a Consumer Proposal

    Pros: Stops collection action and deals with debt quickly. Payments are geared to income. Your assets are generally not affected.

    Cons: Only available for unsecured debt up to $250,000 (excluding mortgage). Leaves you with an R7 credit rating, meaning you will need to repair credit afterwards.

    In a consumer proposal, you make an offer to your creditors to settle your debts for less than what you owe. The offer must be accepted by the majority of your creditors.

    In most cases, you can keep your home when you file for a consumer proposal, as your assets remain untouched. But this depends on your mortgage payments being kept up to date and whether you have enough income to continue paying your mortgage after the proposal.

    Option 3: Filing for Bankruptcy

    Pros: No limit to the amount of debt you can file for bankruptcy. Like with a consumer proposal, payments are geared to income and collection action is stopped.

    Cons: Leaves you with an R9 credit score. May put your assets at risk, depending on your financial situation.

    In a bankruptcy, assets are often sold to pay off debts – including in some cases your house. However, this doesn’t always happen; you may be able to keep your home depending on the amount of equity you have available.

    If you are considering filing for bankruptcy, talk to a financial advisor about options for keeping your home.

    Filing for a consumer proposal or for bankruptcy can often seem scary. But in a financial crisis, it could be your best option. If there is no lien on your house, both filing for a consumer proposal and bankruptcy could protect your home, depending on your financial situation.

    Plus, both have payments that are geared to your income, so you will be able to afford the monthly fees without getting into another financial crisis.

    One downside to both is the hit to your credit score and the time it can take to rebuild credit. But that can still be a better option than losing your home. A good financial advisor will structure your consumer proposal or bankruptcy based on equity.

    Whether you choose to refinance or are considering filing for a consumer proposal or bankruptcy, it is important to weigh your options carefully but also quickly (as we said, time is of the essence during a financial crisis).

    That means talking with a financial advisor who can look at your whole financial situation and help determine the best course for you.

    At DebtCare Canada we are experienced in evaluating the pros and cons of all options – and doing everything we can to save your home.

    If you’re facing a financial crisis, don’t delay. Contact us today for a free consultation. Call 1-888-890-0888 or visit www.debtcare.ca.

  • Liberty Tax Filers – What to Do if You Will Have a Tax Debt You Can’t Pay?

    It’s income tax season and many Canadian filers may be turning to online tax preparation services, like Liberty Tax.

    These services are great options for submitting your income tax return, and for finding more deductions and rebates you may not have known about. But what happens if you’re assessed with a tax debt that you can’t afford to pay?

    Online tax preparation services like Liberty help you file your taxes – but they don’t help you avoid CRA collections.

    If you owe a tax debt that you can’t pay, either through filing with an online tax service or with an accountant, here are some best practices to keep in mind:

    1. File even if you can’t pay.

    If you know you will owe a tax debt, file anyway before the income tax deadline of April 30. Not filing will only makes things worse.

    If you don’t file, you can be assessed with failure to file penalties, and even be charged with tax evasion.

    It’s better to get your return in and look into options for how to clear the tax debt, instead of just letting it fester.

    2. Seek outside tax help.

    While online tax services like Liberty are good tools for filing your return, they are not debt consultants. Case in point: at our last check, Liberty Tax Canada didn’t appear to have a dedicated resource page about owing a tax debt.

    Even if you use a tax service to get filed, the best people to help with an outstanding tax debt are, of course, people who understand debt. Even if you work with an accountant to get your taxes filed, the accountant will not necessarily have access to tax debt resources.

    Instead, you want to seek advice from an experienced tax debt consultant, preferably one like DebtCare Canada with a specific program for dealing with the Canada Revenue Agency (CRA).

    3. Don’t negotiate with the CRA on your own.

    The CRA offers options to negotiate a payment plan and even has some debt forgiveness programs for outstanding interest and penalties. While these can help do not attempt to use them alone.

    This is because the CRA can take the information you provide through these programs and use it to start collection action. For example, if you fill out a financial disclosure form with your banking information, the CRA now knows where you bank and can decide to freeze your account if you miss a payment.

    It’s far better to work with a CRA negotiating specialist.

    4. Look for ways to pay the outstanding tax debt.

    Ideally, it’s better to not owe the CRA at all. So, if you know that you will owe a tax debt you can’t afford to pay, you would (generally) be better off financially taking out a loan or accessing home equity and paying the CRA with that money, and then owing the lender instead of the CRA.

    This is because CRA collection action is so much more aggressive than what the majority of creditors can enforce.

    Also, many lenders will arrange a fixed payment plan, so you can plan out repayment in a realistic timeframe with realistic terms. The CRA may not do the same.

    5. Consider debt consolidation options.

    What can you do if you can’t get a loan big enough to cover the tax debt? The answer here lies in debt consolidation.

    If you have too much debt to qualify for a loan, or a bad credit history, you might look into debt consolidation options, or filing for insolvency.

    Filing for a consumer proposal or for bankruptcy effectively takes care of your unsecured debts by declaring that you are unable to pay them.

    In a consumer proposal, you make a settlement proposal to your creditors – including the CRA. If accepted by the majority of your creditors, your unsecured debts are paid for with a lesser amount. You must be able to prove that your creditors will get more money this way than if you were to file for bankruptcy. In a consumer proposal, there is a debt limit of $250,000 (not including your mortgage).

    If you have more than $250,000 in debt, you might consider a different kind of proposal, or filing for bankruptcy. In a bankruptcy, your assets are often sold to make up the debt owed.

    While filing for insolvency is often not the first choice, it’s a better option than owing a tax debt to the CRA. If you owe a tax debt, the CRA can start collection action – which could include wage garnishments, freezing bank accounts, liens on assets, and in some cases even criminal charges.

    Also, if you wait to pay your tax debt, you will be charged even more because you’ll start to incur interest and penalties.

    If you file your taxes through an online service, like Liberty Tax, remember to:

    • File your taxes on time.
    • Reach out to a debt consultant if you can’t pay.

    At DebtCare Canada, we provide access to one of the only programs in Canada that can resolve a CRA tax problem. We can help you deal with your tax debt quickly.

    Contact us today for a free consultation. Call 1-888-890-0888 or visit www.debtcare.ca.

  • CRA Director Liability and You – Protect Yourself!

    CRA Director Liability and You – Protect Yourself!

    CRA Director Liability and You – Protect Yourself Before It’s Too Late!

    If you own, or are a director for, a company and accept trust money for the federal or provincial governments, you could be subject to CRA director’s liability.

    CRA Director Liability

    CRA director liability means that the Canada Revenue Agency (CRA) can decide that you owe a tax debt for your business – personally.

    Like anything, director’s liability is a process and there are ways that you can protect yourself if you’re assessed.

    Here’s what you need to know.

    What is CRA Director’s Liability?

    In Canada, incorporated businesses are considered separate legal entities from the owners’ personal assets and liabilities. If any debt is accrued by the incorporated business, the employees, officers, and directors are not held personally liable.

    However, this isn’t always the case – also known as director’s liability.

    If the CRA can’t collect an amount owing from the business directly, it may enforce director’s liability and assess the director, or directors, personally. This is most common with unremitted GST/HST trust money or unpaid payroll source deductions.

    What Happens if You Receive a Director’s Liability Assessment?

    If you are subject to director’s liability and can’t pay, the CRA might place liens on your assets, freeze your bank account, garnish wages, and more. And they can do this even if the corporation is no longer operating.

    If you are, or ever have been, the director of a corporation with a CRA tax problem, you need to act fast.

    How to Protect Yourself

    1. Do your due diligence.

    In the event that you are the subject of a director’s liability assessment, paperwork is your ally.

    If you can prove that you made your best efforts to have the corporation pay the GST/HST remittance or other deduction, then you may have a chance of having it overturned.

    According to Mondaq:

    “There is also a “due diligence” defence available to taxpayers who are assessed for CRA director liability by Revenue Canada. Subsections 227.1(3) of the Income Tax Act and 323(3) of the Excise Tax Act contain identical wording which states that a director is not liable for a corporation’s failure to collect GST/HST or Payroll Source Deductions if they “exercised the degree of care, diligence and skill to prevent the failure that a reasonably prudent person would have exercised in comparable circumstances”.

    However, this solution will likely require a tax lawyer and could end up costing more – especially if the circumstances cannot be proven.

    2. Make note of your resignation date.

    If you’ve resigned from the corporation, or are planning to resign, make sure the date is well-documented. This is because, in many cases, there has been a precedent set of a two-year limitation period.

    According to Lerners, many of the statutes that impose liability on a director have a two-year limitation period. For example, a claim for unpaid wages against a director under the Employment Standards Act, a claim for which there is no due diligence defence, cannot be made more than two years after a director resigns.

    However, if a director resigns on paper but continues to act like a director, then the two-year time limit is void. In addition, the resignation needs to be clearly stated. Lerners recommends being on the public record with your resignation and its effective date.

    “When government officials are considering an assessment against a director, the first place they check is the public record,” Lerners notes. “You do not want to be in the position where you receive a letter proposing to assess you personally when you resigned years before, but your resignation was never properly noted on the public record.”

    Again, this solution would most likely require a tax lawyer.

    3. Find solutions for the tax debt.

    There may be an event where you are being assessed for director’s liability and cannot afford to work with a tax lawyer or don’t have a defense available.

    In these cases, a CRA director liability assessment can be dealt with in the same ways as personal tax assessments: by making a plan for the debt.

    The CRA wants their money and you may have to pay it – so the solution becomes finding a way to raise the funds. This might include:

    • Taking out a secured loan.
    • Accessing home equity.
    • Insolvency options, like filing for a consumer proposal or personal bankruptcy.

    If you owe a director’s liability and know that you can’t pay it all, even if you use home equity or a loan, insolvency filing options may be the answer. When you file for a consumer proposal or personal bankruptcy, your unsecured debts — including tax debt — are included.

    This is the only way, besides paying the debt in full, to stop CRA collection action, such as requirements to pay, frozen bank accounts, and liens against your assets.

    Whether you decide to pursue litigation or deal with the CRA director liability tax debt directly, DebtCare Canada can help. We’ll go through your options and find the best way to stay protected.

    Do you have a CRA director liability, call 1-888-890-0888 or visit www.debtcare.ca for a free consultation.

  • The Taxman Taketh Away: How to Reduce Crippling CRA Penalties

    CRA penalties and interest can be crippling and even double the size of a tax debt. We’ve all heard horror stories about the CRA and its efforts to enforce repayment. If you are facing Canada Revenue Agency (CRA) penalties, then you need to determine how you are going to reduce that burden in a way that works for you, not the CRA.

    Yes, the CRA does offer some programs that remove penalties and interest, such as:

    1. The Taxpayer Relief Program – intended to provide relief of penalties and interest to those who can prove that an extraordinary circumstance led to their tax problem.
    2. The Voluntary Disclosure Program – offers a second chance to change a tax return you previously filed or to file a return that you should have filed.

    Keep in mind that these are complicated programs to apply for. Furthermore, where relief is concerned, it is difficult to get CRA approval for even partial relief of penalties and interest.

    Even if CRA agrees to cancel some or all your penalties and interest, you will still be left with a tax debt. Plus, the CRA never makes settlements on tax principal.The only question at this point is: can you pay the tax debt? If you can, then pay it.

    If you cannot, then the problem is a much bigger one.The CRA will collect one way or another, there is no way around that fact.

    The only way that you can get rid of CRA penalties, interest, and potentially reduce the principal tax debt you owe is through a consumer proposal or bankruptcy. Both will also protect you from disastrous enforcement action or stop it if it has already been put in place.

    When exploring either option, keep in mind that consumer proposals and bankruptcies must be administered by a Licensed Insolvency Trustee (LIT). Why is this important? Because LITs do not represent you. They represent your creditors, and therefore will be doing everything they can to collect the most for the creditors. Once you share your personal and financial information with an LIT, they may be able to find ways to go after more of your money and assets.

    Protect yourself and your information by always seeking out your own professional financial advice to explore all your options before going to a LIT.

    At DebtCare, we want to help you become debt free.

    Get in touch to discuss the best option for you by calling 1-888-890-0888.

  • CRA Tax Debt? Is a Voluntary Disclosure Application the Answer?

    Did you know about the Canada Revenue Agency (CRA) Taxpayer Relief Program for tax debt relief? If you have a CRA tax debt you’re likely pretty stressed about it, but don’t worry, you are not alone. Dealing with a tax debt takes work, but in order to avoid further aggravating the issue, it is something you need to do right away.

    Maybe you’ve already considered applying for the CRA’s Taxpayer Relief Program. This program gives taxpayers the opportunity, under certain conditions, to apply for relief of interest and penalties. Since penalties and interest on a CRA tax debt grow very quickly, this is an important resource.

    Tax debt may leave you feeling hopeless, but just remember: you’re not breaking the law simply because you owe money to the CRA. Just don’t ignore the problem either, hoping it will go away. CRA is mandated to act within their means to get the taxes you owe, and they can utilize all available enforcement tricks and strategies to do so. If you’re not careful, this can easily leave you in a financial mess.

    What types of enforcement action are we talking about? Wage garnishments, frozen bank accounts, even property liens, are all popular options for the CRA. Each one, however, has the potential to leave you feeling strapped.

    What options do you have? Enforcement action can be avoided if you have the means to pay the CRA in full. If you don’t, it is time to consider what other avenues are open to get the tax debt dealt with.

    Bankruptcy – If you have a tax debt in addition to a mountain of other debt, filing for bankruptcy may be the smartest solution. Doing so provides you with the ultimate fresh start – one you know you can achieve in as little as nine months.

    Consumer Proposal – A consumer proposal is another option. If your personal debt, including your tax debt, is significant, a proposal to all creditors may result in a decreased total owing, a definite payback period, and no interest.

    What’s important to keep in mind with both of these options though is that you want to have someone in your corner at all times. An experienced debt consultant has the knowledge and expertise to assess your unique situation and help you determine the best course of action to suit your current needs and future goals.

    When you have a CRA tax debt, the best thing to do is work with a qualified financial professional to know your options and make the wisest choice.

    Call DebtCare today at 1 (888) 890-0888.

  • CRA Wage Garnishments – What You Need to Know

    cra wage garnishments dcA few weeks ago we dedicated a blog to Canada Revenue Agency tax problems and how to approach a tax debt before attempting to make a payment arrangement. This week we follow that up with a discussion of what to do once the CRA has levied enforcement action against you, specifically in reference to a wage garnishment. CRA wage garnishments are terrible to have to deal with, and unless you face the problem head-on, you might be in for a struggle financially.

    What kind of struggle are we talking about? The CRA can garnish a significant portion of your income depending on its source. Here are a few examples:

    • CRA wage garnishments to employment income = up to 50%
    • CRA garnishments to pension income = up to 100%
    • CRA garnishments to subcontractors = up to 100%
    • CRA garnishments to companies = up to 100% of gross income

    In addition to issuing no warning prior to garnishing your wages or income, the CRA doesn’t need a court order to issue a garnishment. They simply need to send a notice to your employer/clients and the funds will be taken directly from your income.

    Once a wage garnishment is in place, getting the CRA to remove it is incredibly difficult.

    So, what can you do?

    A consumer proposal is one option for getting rid of a CRA wage garnishment. Once a proposal is in place, the CRA has to remove the garnishment as soon as notification of the proposal is received. Furthermore, a consumer proposal may even reduce the size of your tax debt – a consumer proposal or bankruptcy is the only way to reduce a principal tax debt – and stop interest from accumulating. A consumer proposal will also get rid of your multiple monthly payments, merging all into one, for a far more manageable payment.

    Just remember, don’t go directly to a trustee to negotiate your proposal. While a trustee will represent you, they will also represent the CRA which won’t always mean the best deal for you. Instead, speak with a financial consultant first. A professional financial consultant can facilitate your proposal, negotiate it with the trustee and represent your interests – both protecting your information and getting you the best, most fair, deal.

    At DebtCare, we will stand beside you throughout the entire process. We have years of experience dealing with both CRA wage garnishments and negotiating consumer proposals.

    You can count on us. Call us today 1-888-890-0888.

     

     

  • CRA Tax Debt Collectors Get More Aggressive

    shutterstock_445545787-1The Canada Revenue Agency (CRA) has always had a reputation for strict and aggressive collection behaviour. When money is owed, agents will try their hardest to retrieve it. This usually results in extreme stress on the taxpayer and enforcement action that can wreak havoc on their financial stability. What’s worse, those tactics seem to be getting more and more aggressive. If you’ve got CRA tax debt collectors calling, read on.

    When you receive an assessment, perhaps your initial thought is to call and speak to the CRA directly. When you try to negotiate with the CRA directly, before they even speak with you they will ask you to complete a financial disclosure form – this is a very dangerous form. They will want disclosure of everything from your bank account to your employer, to assets and income and expenses. Some of this information they may already have, or have the resources to obtain, but it is always easiest just to ask you.

    Remember, the goal of each and every agent is to get what is owed, as soon as possible. They are not interested in negotiating a long, drawn-out payment arrangement. Perhaps you assume that they will allow a realistic schedule based on your income. Oh, they will, but it will be based solely on your income – requirements to other creditors will not be considered, and your debt to the CRA will be made the top priority.

    Once this has happened, you will have little recourse. Since you’ve disclosed all of your information – where you bank, work, live, etc. – they can initiate enforcement action against you. This may include a frozen bank account, wage garnishment, even a lien on your home. Unlike other creditors, no court order is needed for CRA enforcement action, and once imposed it can be very difficult to remove.

    Our best advice is this: if you have received a notice of assessment/re-assessment informing you of a tax debt, don’t go directly to the CRA. You should consider speaking with a financial specialist to find out about all of the available options for getting rid of the debt before the CRA comes calling.

    If the CRA has already taken enforcement action, there are federal government programs that can protect your bank account and income. Speaking with a financial specialist, again, is the best approach here. We can help you take advantage of those programs and get rid of the tax debt once and for all.

    Protect yourself and your assets. At DebtCare, we can help you get rid of a CRA tax debt and help you retain your financial footing. Call us today at 1-888-890-0888.