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Taxpayers are often overwhelmed by a tax assessment or a Tax Statement of Account that shows a balance owing that is impossible to pay. One common reaction is to ignore it since you can’t afford to pay.

If I ignore CRA will they go away?

A CRA tax debt has to be addressed immediately. If CRA has assessed you for income taxes or GST owing and you have not made acceptable (to CRA) payment arrangements, a CRA collections officer will commence enforcement action.

What can CRA do to enforce payment of my tax liability?

Enforcement action will usually consist of seizing your bank account, garnishing (seizing) your wages or accounts receivable and sometimes registering a lien on your home. CRA can also take action to seize your personal property to sell and repay your tax debt.

How do I deal with a CRA collections agent?

Dealing with the CRA officer yourself is usually a mistake. Collection officers are very aggressive and will come to your home or office with one purpose – collect as much as possible as quickly as possible. They have many collection powers, but may mislead taxpayers as to what their rights are.

How can I resolve my matter with CRA collections?

You need to retain a professional as soon as CRA notifies you of a tax debt. We can help. We have extensive experience in dealing with CRA collections and have been solving tax debt problems since 1987. We may be able to challenge your tax assessment by filing a Notice of Objection. If not, we can often negotiate a payment arrangement that is acceptable to you as well as to the tax department collections agent. If these negotiations are done at an early stage, we can usually avoid enforcement actions such as bank account seizure or wage garnishments. If your bank account has already been seized or your wages garnished, once a satisfactory payment schedule is agreed to, CRA will lift the garnishment and release your bank account.

The penalties and interest on my tax liability are through the roof – is there anything I can do?

We may be able to reduce penalties and interest on your full tax debt by filing a Taxpayer Relief (Fairness) Application.

What will happen if I am never able to pay off my tax liability?

If the amount is too large to ever pay off we will direct you to a bankruptcy trustee who will either make a consumer proposal or submit a bankruptcy application to fully eliminate the taxes owing.

Case Studies

Gail from British Columbia operates a corporation that runs and hosts trade shows. The corporation had never filed GST/HST returns and both the corporate and personal bank accounts had been frozen by a CRA collections officer tax garnishment. Her accountant was not able to assist her, so she retained our BC tax law firm. We escalated to the Collections Officer’s Team Leader immediately to remove the personal income tax garnishments which were levied illegally. Next, we were able to negotiate a repayment plan over a 26 month period to allow the corporation to continue its business without a total loss of operating capital. When the tax-year end came a few months later, we were also successful in extending the payment arrangement to include the current year funds owing without any further legal collection action taken by CRA. Gail was able to continue in business and she paid off her income tax debts in full.

Our long time client Richard, an accountant from Toronto, had tax liens placed on his personal accounts, including investments, and CRA seized and froze his bank accounts and investment accounts unexpectedly. Our Canadian tax lawyers negotiated with the CRA Collections Officer for a repayment plan that would minimize financial disclosure by limiting the repayment period to six months. Thanks to our quick response to his issue, the CRA tax garnishees on Richards accounts were lifted before the accounts were emptied. This gave our client the ability to keep up with his other monthly expenses and eliminated the need to consider a consumer proposal or bankruptcy.

Larry received a Notice of Assessment from Revenue Canada which stated that he owed an additional $34,000 in unpaid Income Tax. He lives in southern Ontario and commutes to work in the US. His health is failing. He began receiving threatening letters from CRA collections officers that threatened to freeze his bank accounts if he did not pay his income arrears immediately. He retained our Ontario tax law firm. Our Canadian income tax lawyers immediately filed a Notice of Objection on his behalf, and right away CRA reduced the amount owing by half to $17,000. Next, our tax litigation firm negotiated a payment arrangement with Revenue Canada on his behalf. Despite the collections officer initially asking for $4,500 a month, a sum he could not possibly afford, our income tax lawyers worked out monthly $1,000 payments that halted all collections actions and allowed him to pay off the arrears within a reasonable time frame and at an amount he could afford with no tax garnishee put in place.


Pro Tax Tip

Tax Audits in Ontario

There are over 350,000 tax audit and review actions conducted by the Canada Revenue Agency on a yearly basis. Around 15,000 of these tax audits deal with “cash only” businesses (i.e. the underground economy). Additionally, an estimated 35,000 are tax shelter audits.

Get your CRA tax issue solved

Address: Rotfleisch & Samulovitch P.C.
2822 Danforth Avenue Toronto, Ontario M4C 1M1