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Tag: negotiate with the CRA

  • Trying to Negotiate with the CRA is a Dangerous Game

    We are officially reaching the end of the 2017 tax season, and that means that most Canadians have completed filing and many are patiently waiting for their refund cheque in the mail. If, however, you’ve yet to file because you know a tax debt is headed your way, or have filed and have your assessment in hand, you’re probably at the other end of the spectrum. Your first thought may be to call the Canada Revenue Agency directly and attempt to negotiate a payment plan, but we urge you to read on and reconsider that approach. Trying to negotiate with the CRA is a dangerous game – one that can land you in a heap of financial trouble.

    The CRA is well-known for their oft-nefarious tactics for collecting what they believe is owed. When you have a tax debt, the CRA is not interested in a long term payment plan with low monthly payments, and this is primarily why it is so dangerous to call.

    When you initially call the CRA to negotiate a payment plan, things may not seem so bad. Agents are encouraged to cultivate a ‘friendship’ with you in the hopes that you will willingly share as much financial information as possible. This is usually accomplished with a financial disclosure form. In this form you’ll be asked questions about your income, where you work, where you bank, where you live and your current financial obligations. Don’t be fooled – the CRA is not asking for this information to help create a payment plan that suits your current financial situation.

    Once you’ve provided this information, the CRA may agree to accept a temporary payment plan, but once this payment plan expires, that ‘friendship’ will also expire. Now that the CRA has all of your financial information, the new payment plan will take into account none but the most basic living necessities (all other creditors will be subtracted from the equation) and you’ll be facing a monthly payment far and above what you can reasonably afford to pay.

    What if you don’t pay? Thanks to that financial disclosure form, not paying isn’t really an option. Not only does the CRA now know all about your finances they also know where you work, bank and live, making wage garnishments, frozen bank accounts and property liens that much easier to obtain.

    So, if you shouldn’t be calling to negotiate directly with the CRA, what options are available? Unless you can pay the debt in full, speak with a financial consultant to discuss the various options available to clear the debt before enforcement action is levied against you. Once this happens, things are going to become much harder to navigate.

    At DebtCare, we know how difficult the CRA can be to deal with. We also know how to protect you when it comes to dealing with a tax debt.

    Get in touch today by calling 1-888-890-0888.

     

  • 3 Reasons Why You Should Not Try to Negotiate with the CRA Directly

    3 Reasons Why You Should Not Try to Negotiate with the CRA Directly photoThousands of Canadians struggle with tax problems. One of the worst things that you can do if you have a tax problem that has or will result in a debt that you can’t pay is to try to negotiate with the CRA directly. The reason for this is because the CRA has a single mandate and that is to close your file, whether the money is successfully collected from you or not.

    It may sound like it doesn’t make sense, but in fact it does. When a taxpayer is behind filing tax returns or has a large tax debt, the CRA’s success is actually benchmarked by files closed and not dollars collected. This means that, as time goes on, interest and penalties accumulate and by the time you file late returns or decide to try to pay your tax debt, bam – your tax debt may have doubled or even tripled in size.

    How does the CRA close files? By coming after you! Leveraging tactics like wage garnishments, sending garnishments to your clients (in the case of self-employed people and contractors), freezing your bank account, placing liens on your property and more… Sometimes one tactic will be deployed or multiples will be deployed all at once. Doing this forces you to do one of two things – pay the debt or go bankrupt or file a consumer proposal – all three result in your file being closed.

    This is why negotiating directly with the CRA can be dangerous. The average person doesn’t know what the CRA is capable of, so in good faith will try to negotiate, resulting in more personal exposure. The CRA will play good cop, bad cop – having one agent go after you and then another swooping in and being nice, delicately extracting your personal information to be used against you at a later date. The CRA may accept a temporary payment plan or suspend an enforcement measure “if” you complete a financial disclosure form that includes telling them any assets that you own, where you work and where you bank.

    While the CRA has methods to find out your personal information, why serve it up to them on a silver platter, making it that much quicker and easier for them to come after you? At the end of the day, if you have a tax debt that you cannot pay you have a financial problem.

    A financial problem can be resolved through a consultation with a financial consultant who routinely deals with CRA matters. Don’t go it alone – good help is out there. If you have a tax debt and you need help please call DebtCare Canada at 888-890-0888 or visit www.debtcare.ca.