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You will have a tax debt 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 then commence enforcement action. This action will usually consist of seizing your bank account, garnishee (seizing) your wages or accounts receivable and sometimes registering a lien on your home.

We can help solve your CRA collections problems. We have extensive experience in dealing with income tax collections officers and CRA tax debt.

Depending on your exact circumstances we may be able to fully suspend the collection action by filing a Notice of Objection to your income tax assessment. If not, we can often negotiate a payment arrangement that is acceptable to you as well as to the tax department collections agent. Once a satisfactory payment schedule is agreed to, the CRA will lift the garnishment and release your bank account.Read more

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When you can’t clear your tax debt with the CRA, you are required to call the CRA collection officer and make a payment arrangement. Such an arrangement can involve an initial substantial partial payment followed by smaller payments over a set period. Note that the longer the payment period, the higher the interest you will pay for tax debt. Furthermore, you must continue to file timely tax returns with the CRA.

Suppose you are unable to pay your tax debt via a payment arrangement due to insolvency. In that case, you are obligated to contact the Superintendent of Bankruptcy’s office within 90 days of receiving your assessment/reassessment notice. Failing to do so compels the CRA to initiate measures aimed at recovering the debt, i.e. seizing your bank account, placing a lien on your house, garnishing your salary, etc. The CRA can also initiate legal proceedings against you in court.

A consumer proposal applies to individuals who owe the CRA a tax debt not exceeding $250 000. You begin by contacting the Licenced Insolvency Trustee(LIT), which helps develop an arrangement to pay your tax debt. The LIT first evaluates your financial position before providing you with viable ways to pay your CRA tax debt. Your consumer proposal will typically involve paying at least 30% of the debt and the remainder in disbursed payments for a period not exceeding five years. These payments are made through the LIT.

Yes. By law, the CRA is a secured creditor with even greater debt collecting power than a bank. Consequently, the revenue authority can place a lien on your house without even needing to go to court to do so. A consequence of the lien is that the CRA would take all the proceeds that result from the sale of your home. However, you can keep the CRA from putting a lien on your house by filing a consumer proposal with the Licensed Insolvency Trustee or filing for bankruptcy with the Office of the Superintendent of Bankruptcy.


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