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Tag: taxpayer relief

  • 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.

  • Taxpayer Relief in Canada – Do I Qualify

    If you have a tax problem in Canada, repercussions with the Canada Revenue Agency can be severe. If you filed your income taxes late or committed an infraction under the Canadian Income Tax Act, like failing to disclose income or writing off expenses that you weren’t entitled to, the Canada Revenue Agency has incredible power to punish you. By far the most common weapon that they use to punish you is your pocket book.

    When an income tax return is filed late and the CRA assesses what you owe, or a previously filed return is re-assessed and new monies are owed, the CRA will add interest and penalties to the amount of the tax debt that you owe. Often times, when an individual has a tax debt, the amount that they owe will double in size once the interest and penalties are calculated.

    Sometimes individuals have personal circumstances that led to their tax problem which is why taxpayer relief in Canada exists. Taxpayer relief in Canada is a formal program offered by the Canada Revenue Agency where the CRA can agree to cancel all or part of the interest and penalties. You can qualify under the Taxpayer relief program in Canada for one of the following reasons:

    A natural disaster like a fire or flood. For example, you misstated expenses resulting in an inaccurate return filing because your basement flooded and all of your receipts were destroyed

    1. Extreme financial hardship
    2. A documented personal issue like a medical problem or death in the family
    3. An error on the part of the CRA

    The only challenge with the Taxpayer relief program in Canada is that it is a long and complicated process and very few applications under this program are granted. To hire a professional to make an application under this program could cost you thousands. In addition, the CRA will not reduce the principal tax debt owed. The CRA does not offer any program that will reduce the principal tax debt that is owed.

    Before considering making an application under the Taxpayer relief program in Canada you may want to first look at the principal amount of the tax debt you owe and whether you can afford to pay it off at all. Often people who owe a large tax debt are not even in a position to pay it, regardless of whether or not they receive interest and penalty relief under the Taxpayer relief program in Canada.

    The longer you stretch out the time that you have a tax problem, the worse the tax problem will become. If the application under the Taxpayer relief program in Canada is denied, you will owe further interest that will have accumulated through the application period. The CRA will also continue to try to collect on the principal tax debt owed.

    There are other financial programs available that will freeze the interest on the tax debt that you owe and can even eliminate or reduce interest, penalties and the principal tax debt that you owe. These programs can also stop CRA collection action and provide you with immediate relief. These programs are not available through the Canada Revenue Agency, however you may access them through a financial consultant who works with people who have debt problems.

    For more information about the Taxpayer relief program in Canada or if you have a tax problem and need financial guidance or debt relief please visit www.debtcare.ca or call 416-907-2582.