Tag: Canada Revenue Agency

ARE YOU UP ON THE LATEST PHISHING SCAMS? YOU SHOULD BE!

Post author By Brandon Smith
Post date March 2, 2016

Beware of both old and new phishing scams

We previously published three blogs and one vlog warning about various phishing scams:

BEWARE OF PHISHING AND SPEAR PHISHING SCAMS
VAUGHAN DEBT COUNSELLING ADVISES BEWARE OF TAX SEASON SCAMS
CANADA REVENUE AGENCY SCAMS: IF YOU READ ONE ARTICLE, READ THIS ONE
#VIDEO: CRA PHONE SCAM: IF YOU WATCH ONLY 1 VIDEO WATCH THIS ONE!#

The vlog on the CRA phone scam was published in December 2015. Since then, I know several people who received the CRA phone scam call and one person who actually fell for it and was defrauded.

On March 1, 2016, the Bank of Canada issued a press release on the Bank of Canada email scam, one of the newest phishing scams around. Here is a copy of the Bank of Canada press release:

Since the CRA phone scam remains rampant and now there is a Bank of Canada email scam. we wish to again present to you, as a caution to remain vigilant, our video on the CRA phone scam and to protect yourself against the scammers.

What to do if you are a victim of one of the phishing scams and have too much debt

If you’ve been scammed by one of the phishing scams, and now are trapped with high debt that you cannot repay, you need a professional trustee to help you manage the situation before it reaches a critical stage where bankruptcy is your only option. We have been able to help many individuals carry out a successful debt settlement program. It all began with debt counseling. The first step is a realistic household budget. Successful completion of such a program, will free you from the burden of your financial challenges to go on to live a productive, stress-free, financially sound life.

If you’re like many Canadians on the brink of a financial crisis, you need the help of a professional trustee today while you have options. The Ira Smith Team can help before disaster strikes. There is a way to manage debt Starting Over, Starting Now. Contact us today.

Brandon Blog Post

DioGUARDI TAX LAW: BELIEVING THEIR INTENSE MYTHS KEEPS YOU FROM SOLVING YOUR DEBT PROBLEMS

Post author By Brandon Smith
Post date December 7, 2015

DioGuardi Tax Law – The Introduction

Several months ago we first introduced you to Philippe DioGuardi, a Canadian tax lawyer – The Tax Lawyer; Even a High Profile Tax Fighting Tax Lawyer Has to Pay His Income Tax. He’s the high-profile tax lawyer of DioGuardi tax lawyers who portrays himself as a one-man bulldog lawyer crusader against the unfair tactics of the Canada Revenue Agency (CRA). Ironically, at that time, a Toronto Star investigation revealed that Philippe DioGuardi had his own tax problems with the CRA and he paid up; the DioGuardi tax law couldn’t create the DioGuardi tax amnesty magic or “change the game”, to quote his own radio ads.

DioGuardi Tax Law – The Change

Recently I noticed that Philippe DioGuardi, a prominently featured DioGuardi tax lawyer, was no longer featured in the radio ads. Instead, they are being voiced by his father Paul DioGuardi. The ads are now very low-key, with none of the old bluster and bravado. And, I wondered why DioGuardi tax law no longer featured Philippe DioGuardi, the tax lawyer in Toronto.

That is until I read the latest Toronto Star article about him stating, “Self-styled tax fighter Philippe DioGuardi has been given a six-week suspension, a $5,000 fine and an order to pay $75,000 in legal costs after being found guilty of professional misconduct by the Law Society of Upper Canada” (LSUC). So LSUC found law society misconduct charges were proven and assessed a tribunal penalty and didn’t buy into the DioGuardi tax law concept of income tax law, as written by Philippe, and so he has a brief rest from the practice of law – a twist on DioGuardi tax amnesty!

dioguardi tax law

DioGuardi Tax Law Professional Misconduct

The law society lawyer was successful in proving, according to the Order Summary of the Law Society Tribunal Philippe Joseph Mario DioGuardi (1990), of the City of Mississauga was found to have engaged in professional misconduct for:

failing to act with integrity by having eight clients execute a Retainer Agreement which contains terms that benefit DTL to the potential detriment of the tax debtors clients;

between April 2007 and October 2012, failing to deposit client money retainer funds received from six clients into a trust account or transferred the client retainer money from the trust to general within a few days of receipt of the funds prior to the performance of any or very little legal services for which he was retained;

transferring the retainer client funds paid by a client into DTL’s general account within a few days of receipt of the funds prior to the performance of any legal services for which he was retained;

immediately transferring the retainer funds paid by a client into a third party trust account for the benefit of DTL alone rather than for the client’s benefit and the client no longer had ownership of the monies;

failing to perform legal services to the standard of a competent lawyer in respect to six tax troubles matters.

DioGuardi tax law, as written by Philippe, is an interesting experiment. It may not be right, but it has certainly garnered a lot of attention.

dioguardi tax law

If you have too much debt, contact us

Do you or your company have unpayable tax debts? Are you looking for unpayable tax debt solutions? If you are an individual or company who needs to free themselves from the stress and strain of too much debt, and especially if you have been told your situation is hopeless, Ira Smith Trustee & Receiver Inc. can prepare and implement the plan made just for you, to free you from the burden of your financial challenges to go on to live a productive, stress-free, financially sound life. This plan includes resolving unpayable tax debt solutions. We have vast experience in helping people and companies with a variety of financial challenges.

If you’re experiencing serious debt issues with the CRA, or for any reason, contact a professional trustee for a free, no-obligation consultation. The Ira Smith Team does not try to write new insolvency law or tax law. Rather, we will evaluate your situation within the existing statutes, and help you to arrive at the best possible solution for your problems, whether that solution is a bankruptcy alternative like credit counselling, debt consolidation or a consumer proposal or bankruptcy. Starting Over, Starting Now you can be debt-free with the help of a professional, licensed trustee in bankruptcy.

Brandon Blog Post

CANADA REVENUE AGENCY SCAMS: IF YOU READ ONE ARTICLE, READ THIS ONE

Post author By Brandon Smith
Post date November 23, 2015

Canada Revenue Agency scams

Canada Revenue Agency, or as it is also known, CRA, has noticed an increase in telephone scams where the caller claims to be from the CRA but is not, and is asking Canadians to beware. There is a CRA newsletter on the issue of Canada Revenue Agency scams and the fake Canada Revenue Agency scammers. These calls are fraudulent and could result in identity and financial theft, or vulnerable people being bullied into making a payment to a bogus Canada Revenue Agency officer. They will try to make you believe that the payment is going to a legitimate CRA account, but it isn’t. There is no such CRA program.

Canda Revenue Agency scams: Anyone is a target

Everyone is at risk of having their identity stolen and it’s easy to be taken in. Most people get a little nervous when they receive a phone call from the CRA; it’s like having a police car driving right behind you even if you’re not doing anything wrong. Recognizing the importance of warning the public about identity theft, we have already published several blogs on the subject:

Canada Revenue Agency scams: It will never happen to me, right?

A recent event prompted us to reach out and let you know that anyone can be a target. Ira Smith of Ira Smith Trustee & Receiver Inc. recently received a voicemail at home from someone claiming to be from CRA collections. Being a seasoned, professional trustee and aware of the recent uptick in identity fraud scams, Ira was immediately on guard when the caller asked him to have his SIN number ready for security purposes. Ira Googled the phone number that was left on the voicemail and sure enough, it was a scam.

Click below to listen to the CRA scam voicemail

Canda Revenue Agency scams: Do the RCMP know about this?

According to Corporal Josée Rousseau of the RCMP’s anti-fraud department, police first started seeing the scam two years ago. Callers work from boiler rooms and randomly phone people from purchased calling lists. They tell their victims they’re from Canada Revenue Agency, and they owe money in unpaid taxes. The RCMP also stated the callers are aggressive and often claim they will come to the victim’s house and arrest them if the money is not paid. They say many of the callers speak with a foreign accent and insist the money be paid immediately, either by credit card or via Western Union.

If you get a call from someone claiming to work for the CRA and want to confirm the authenticity of the call contact the CRA at 1-800-959-5525 for business-related calls and 1-800-959-8281 for individual calls. Or you can do as Ira did and Google the number and see what other people are reporting.

Canda Revenue Agency scams: Tips to identify possible scams

Here are some tips from the Canada Revenue Agency to help you identify possible tax scams:

The CRA:

never requests prepaid credit cards;
doesn’t ask for information about your passport, health card, or driver’s license;
does not share your taxpayer information with another person, unless you have provided the appropriate authorization; and
never leaves personal information on your answering machine or asks you to leave a message containing your personal information on an answering machine.

When in doubt, ask yourself the following:

Is there a reason that the CRA may be calling? Do I have a tax balance outstanding?
Is the requester asking for information I would not include on CRA forms with my tax return?
Is the requester asking for information I know the CRA already has on file for me?
How did the requester get my email address or telephone number?
Am I confident I know who is asking for the information?

If you have too much debt you need to take action NOW

Have you been a victim of identity theft or financial theft? If for any reason you’re facing serious financial difficulties, contact Ira Smith Trustee & Receiver Inc. today. We will review your file and take immediate action to get you back on a path towards debt-free living Starting Over, Starting Now.

Brandon Blog Post

IDENTITY THEFT: ARE YOU AT RISK?

Post author By Brandon Smith
Post date April 7, 2015

Identity theft is a hot topic these days and whether you realize it or not, you are at risk. Identify theft is on the rise and it can happen to anyone.

What is Identity Theft? According to the Canadian Anti-Fraud Centre, identity theft refers to the preparatory stage of acquiring and collecting someone else’s personal information for criminal purposes. As of January 8, 2010, Senate Bill S-4 became law, making it illegal to possess another person’s identity information for criminal purposes.

Who is at risk? In short, everyone is at risk. Identity theft is a threat to anyone who has a credit card, owns real estate, pays taxes, owns insurance… In the last year alone major retailers have had their payment systems hacked, compromising the personal information of millions of customers. Home Depot had 56 million cards compromised; Target had 40 million. Global News reported that there have been nearly 4,000 privacy and data breaches in federal departments over the last year or so. The worst offender was the Canada Revenue Agency.

How do thieves acquire someone else’s personal information? In addition to widespread data breaches, the classic examples of identity theft techniques are rummaging through people’s garbage and/or stealing their mail in order to obtain bank statements, credit card statements, driver’s license or healthcare card renewals – any piece of mail with personal information. Of course the Internet has allowed for much more sophisticated and elaborate forms of identity theft – malware, spyware, viruses, phishing, spear fishing and hacking are effective ways to collect personal information.

If you’re a victim of identity theft then no doubt you’re in the midst of some serious financial issues right now that require the help of a professional trustee. Contact the Ira Smith team as soon as possible. Financial problems can be solved given immediate action and the right plan. Starting Over, Starting Now you can be on the road to getting your old life back.

Watch for our next blog when we’ll be discussing Identity Theft – How to Recognize if You’re a Victim.

Tags Canada Revenue Agency, Canadian Anti-Fraud Centre, hacking, Home Depot, identity theft, malware, phishing, spear fishing, spyware, Target, viruses

Brandon Blog Post

VAUGHAN BANKRUPTCY TRUSTEE WARNS OF DANGERS IN TAKING FREE TAX ADVICE

Post author By Brandon Smith
Post date March 3, 2015

As a Vaughan bankruptcy trustee, we always warn our clients that this time of year can be dangerous. In our last blog we warned you about tax season scams. This week your Vaughan bankruptcy trustee is warning you about the dangers of taking free tax advice. There are many places to get free tax advice, and quite frankly all of them are dubious. Unless the person giving the advice is a trained and licensed financial services professional, the only thing you should do with free tax advice is ignore it, or you could find yourself in a worse financial and legal position than you started in.

It seems that everyone is looking ways to avoid paying income tax. As we discussed in a previous blog The Tax Lawyer; Even A High Profile Tax Fighting Lawyer Has To Pay His Income Tax, there is no miracle cure or quick fix when you owe money to the Canada Revenue Agency (CRA). Yet that doesn’t stop people from posting all sorts of questions on the Internet looking for free advice. The problem is when you post questions in online forums and chat rooms you have no idea who is answering your question and giving you advice. As a Vaughan bankruptcy trustee, many times we are shocked to see the kind of advice is being posted on the Internet also about frequently asked bankruptcy questions.

Although we do not provide income tax advice, as a Vaughan bankruptcy trustee, we do set filters to obtain postings having to do with income tax debt; many questions and answers regarding income tax are posted. The Internet allows for anonymity and the person who has identified himself/herself as a tax professional may in reality be a teenager having some fun. Or worse, perhaps it is a scammer or malware malcontent collecting email addresses! Although the Internet can be a valuable resource, online forums and chat rooms are not the places to seek tax advice. The same applies to well meaning friends, family and colleagues unless they are trained financial services professionals.

Seek financial advice from a trained, experienced, licensed professional ONLY! If you’re experiencing financial difficulties for any reason including monies owed to the CRA contact your Vaughan bankruptcy trustee, Inc. today. Starting Over, Starting Now you can put your financial difficulties behind you.

Tags Bankruptcy, Canada Revenue Agency, CRA, frequently asked bankruptcy questions, income tax, income tax debt, starting over starting now, tax, tax advice, tax professional, tax season scams, trustee, Vaughan, vaughan bankruptcy trustee

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VAUGHAN DEBT COUNSELLING ADVISES BEWARE OF TAX SEASON SCAMS

Post author By Brandon Smith
Post date February 24, 2015

When we perform Vaughan debt counselling, we always advise that there is no miracle cure or quick fix when you owe money to the Canada Revenue Agency (CRA). For a real life example, see our discussion in an earlier blog The Tax Lawyer; Even A High Profile Tax Fighting Lawyer Has To Pay His Income Tax. Unfortunately there is more to worry about than the CRA during tax season. There are scam artists out there just waiting to take your money. Through our Vaughan debt counselling, Ira Smith Trustee & Receiver Inc., we are able to provide some valuable information and advice to help protect you from the villainous forces lurking at the other end of a phone call or email transmission.

In fact, it was through our Vaughan debt counselling that we learned of these scams. Scammers are sending emails and making phone calls, claiming to be the CRA. These communications, asking for information including credit card data, bank account numbers and passwords and passport numbers are designed to steal your identity and/or your money. Email scams frequently contain embedded malicious software that can harm your computer and put your personal information at risk. DO NOT click on any of the links in the emails. Typically an email or telephone scam involves one of these two scenarios.

You have a refund pending from CRA and the communications will go on to instruct the receiver to provide personal information in order to receive the benefit.
You or your company, as a result of an audit, owe “back taxes”. You are advised you have to “pay up” ASAP to avoid a fine or the person is told there is an outstanding arrest warrant which can be avoided if the tax payment is made promptly. In many cases individuals are being told they will be deported if the taxes are not paid right away.

These types of communication are not from the CRA, should be ignored and reported to the RCMP or Canadian Anti-Fraud Centre at 1-888-495-8501 or http://www.antifraudcentre.ca.

The CRA:

NEVER requests information from a taxpayer about a passport, health card or driver’s license.
NEVER divulges taxpayer information to another person unless formal authorization is provided by the taxpayer.
NEVER leaves any personal information on an answering machine or asks taxpayers to leave a message with their personal information on an answering machine.

If you find yourself in financial difficulties as a result of a scam or for any other reason contact Ira Smith Trustee & Receiver Inc. We serve the GTA through our Vaughan debt counselling and our other services that are bankruptcy alternatives. We can help get you back on the road to solid financial footing Starting Over, Starting Now. Watch for our next blog when we’ll be discussing the dangers of taking free tax advice.

Tags Bankruptcy, Canada Revenue Agency, CRA, Debt, debt counselling, email scams, phone scams, receiver, starting over starting now, tax scams, trustee, Vaughan, Vaughan debt counselling

Brandon Blog Post

THE TAX LAWYER; EVEN A HIGH PROFILE TAX FIGHTING LAWYER HAS TO PAY HIS INCOME TAX

Post author By Brandon Smith
Post date February 11, 2015

Nothing is certain except death and taxes.

Benjamin Franklin
The tax lawyer learned another certainty that the Canada Revenue Agency (CRA) will get what’s coming to them even if your name is Philippe DioGuardi and you have a radio advertising campaign with slogans that include:

“I don’t cheat, I change the game.”
“Tax problems end here.”

For those of you who are unfamiliar with Philippe DioGuardi, he is the tax lawyer who has been bombarding the radio airwaves with spots that represent him as a one man crusader against the unfair tactics of the CRA. A recent Toronto Star investigation revealed some shocking information regarding the tax lawyer Philippe DioGuardi’s own tax problems with the CRA. Some of these startling revelations include:

He over-drew $2 million from the law firm he co-owns with his father Paul.
Ontario’s legal regulator is investigating nine complaints against him.
The tax lawyer only recently settled his own $147,000 debt to the CRA.
His estranged DioGuardi wife Elena wants spousal support of $25,000 a month.

By 2012 Philippe’s overspending was out of control. His father Paul was left with no alternative but to come out of retirement and take control of the law firm. In order to prevent Philippe from continuing to over-draw from the firm’s bank account, Paul changed the signing authorities and put the tax lawyer on a strict budget.

Philippe DioGuardi’s story sounds like a bad reality television program. The tax lawyer blames many of his financial problems to his estranged wife’s (who he’s been describing as a Russian mail-order bride) spending habits and his financial commitments to his 3 children from a previous marriage. All of the dirty laundry is being aired in public and financial documents submitted by the tax lawyer in the divorce action show that:

Between the years 2009 and 2012, the firm had annual revenues of about $6 million, and spent about $2 million a year on advertising and marketing.
As of 2012, Philippe DioGuardi owed the CRA more than $140,000, including $58,000 in unpaid taxes from 2011.
By 2013, the CRA was trying to get a response from DioGuardi, with no luck.
The arrears were paid off in full over time, through an arrangement the tax lawyer negotiated with the CRA.

The reality is that even a high profile tax fighting lawyer has to pay his income tax. There is no miracle cure or quick fix when you owe money to the CRA. If you’re having serious financial difficulties and owe money to the CRA, contact Ira Smith Trustee & Receiver Inc. We don’t have a $2 million advertising campaign. Our philosophy is that corporate or personal financial problems can be solved given immediate action and the right plan so that Starting Over, Starting Now you can live a debt free life.

Tags Bankruptcy, Canada Revenue Agency, CRA, Debt, DioGuardi, DioGuardi wife, Paul DioGuardi, Phillipe DioGuardi, starting over starting now, the tax lawyer

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Target Canada owes more than $5-billion to creditors

Post author By Brandon Smith
Post date January 25, 2015

Target Canada, Canada Revenue Agency, creditor protection, out of work, Canada, creditor protection, Ira Smith, Ira Smith Trustee & Receiver Inc., Starting Over Starting Now, debt, trustee — Image courtesy of The Toronto Star

This blog about Target Canada is courtesy of the article written by Francine Kopun, Business reporter, The Toronto Star, published on Thursday January 22, 2015. Our Ira Smith is quoted extensively.

From India to Milton, Target Canada owes money.

Target Canada owes money to nearly 1,800 businesses around the world, from India to Shanghai and Brampton to Winnipeg.

The list runs 44 typed pages. It includes 3greenmoms, makers of eco-friendly sandwich bags in Potomac, MD ($3,751); 20th Century Fox Home Entertainment in Toronto ($3.7-million) and the Banhat Rattan Bamboo Co-operative in Ho Chi Minh City ($1,596).

Target Canada owes $1,926 to the Retail Council of Canada and $433,248 to Roots Canada Ltd. Roots was behind the popular Beaver Canoe line of goods tailor-made for Target Canada.

Target Canada owes Revenue Quebec $6.529-million. It owes more than $12-million to the Canada Revenue Agency.

“Did I see this coming? No,” said Jennifer Carlson, founder, Baby Gourmet Foods Inc., an Edmonton-based company owed $62,701.

Carlson said her first thought, when she heard the news of Target Canada shutting down, was for the employees who would be losing their jobs, and their families.

“Target was a great partner for us and at this point, it’s going to be (about) growing with our other retail partners,” said Carlson.

Target Canada announced last week it was seeking creditor protection as it winds down operations, closing all 133 stores and putting 17,600 people out of work over the next five months.

As of Thursday, all Starbucks operating within Target Canada stores will be closed, a Target spokesman confirmed.

“Generally speaking, the team members will be re-assigned to other areas of the store,” said Target Canada’s Eric Hausman.

Unable to keep shelves stocked and customers interested in their retail offering, Target executives made the decision to leave Canada rather than spend another five years chasing profits.

It has lost about $7-billion on its Canadian operations so far.

On paper, it seems that Target Canada is in a position to pay off all creditors in full, with assets and liabilities both in the $5-billion range. But the true value of the recorded assets is always less than stated, said Ira Smith of Ira Smith Trustee & Receiver Inc.

“Everything gets recorded at original cost — what they paid for the assets. When they do the inventory sale, they will not recoup the original cost. The racking and fixtures, once they shut down, is by the pound,” said Smith.

Some assets listed by Target Canada include credit owing from vendors, but as Smith points out, once Target Canada stops paying the vendors, the vendors won’t be making good on those credits.

What Target Canada will be able to realize from the sales of leases and properties it owns will also likely be less than what they originally paid.

“Who is going to step in and pay what Target Canada did? No one,” said Smith.

Some – not all – the properties leased to Target Canada, were guaranteed by the parent corporation in Minneapolis.

Target Canada likely has its own internal estimate, but that is not something it is going to share, said Smith.

Target Canada has 30 days from the date of filing for creditor protection to present a plan that will satisfy creditors. It may also seek a 30-day extension from the courts, said Smith.

The parent company is owed at least $3.1-billion, but Smith, who has read the filings, said the amount is unsecured.

Contact Ira Smith Trustee & Receiver Inc. before your business problems lead to your business closing. The earlier you begin to deal with debt, the more options you’ll have. We approach every file with the attitude that financial problems can be solved given immediate action and the right plan. Starting Over, Starting Now you can live a debt free life.

Tags Bankruptcy, Canada, Canada Revenue Agency, creditor protection, Debt, Ira Smith, Ira Smith Trustee & Receiver Inc., out of work, starting over starting now, Target Canada, trustee

Brandon Blog Post

CANADA REVENUE AGENCY SOCIAL MEDIA

Post author By Brandon Smith
Post date November 4, 2014

Canada Revenue Agency social media investigative staff review your latest photos and news on social media sites that you post to. Did you know that? If you do post to social media sites and you did not know that Canada Revenue Agency social media investigative staff may be looking at your postings, then you’re like most of the adults online.

Sharing everything from your marital status to what you’re eating at a restaurant on social media sites has become second nature. We have a great need to share, without giving it a second thought. According to Pew Internet Research, as of September 2013:

71% of online adults use Facebook
17% use Instagram
21% use Pinterest
22% use LinkedIn

You may think that participating in social media is a harmless activity and you may even post some white lies, but after all, the Internet encourages creativity. And, who could it hurt anyways? The answer is you! It’s not just your friends checking out your Facebook page, the Canada Revenue Agency (CRA) may be checking you out as well. The Canada Revenue Agency social media investigative staff use an audit technique called Indirect Verification of Income.

The CRA is on the lookout for folks living a high income life – big house, fancy cars, and exotic vacations – without reporting the income to sustain such a lifestyle. This kind of behaviour is a huge red flag for the CRA and you could be in for an audit. Rest assured that the CRA, including the Canada Revenue Agency social media investigative staff which is an increasingly important component of the investigation side, will leave no stone unturned in search of the unreported income.

We had an interesting file that demonstrated exactly how deep in trouble you many find yourself if you post everything on social media sites, and lie. A high income earner was trying through a Proposal to compromise $400K of his income tax debt (amongst others). Throughout his entire professional career he had photos of himself in front of yachts, mansions and fancy cars to show how successful he was. The only problem was that none of it was ever his. It took a year to convince the CRA that neither he nor his spouse ever owned such assets!! Ultimately we were successful in satisfying CRA’s concerns and the CRA voted in favour of his Proposal.

Before you post your life story on social media sites, ask yourself what the Canada Revenue Agency social media investigative staff will think if they crawl your pages.

If you’re having serious financial issues related to income tax debt or any other cause, contact Ira Smith Trustee & Receiver Inc. With a solid financial plan in place Starting Over, Starting Now you can free yourself of debt.

Tags Canada Revenue Agency, Canada revenue agency social media, CRA, CRA audit, Debt, Facebook, income tax debt, Instagram, LinkedIn, Pinterest, receiver, social media, social media sites, starting over starting now, trustee

Brandon Blog Post

CRA: TAX RETURN FILED BUT NO MONEY TO PAY?

Post author By Brandon Smith
Post date June 22, 2014

Will CRA be looking for you? June 17^TH was the deadline for self-employed individuals in Canada to file their 2013 income tax and benefit return. You filed your return on time to avoid a late-filing penalty on amounts owing, and gasped when you saw how much money you owe the CRA. How are you going to pay your tax bill? The CRA is not known as a charitable organization and they have the power to withhold HST/GST and child tax credits, seize money in your bank account and garnish your wages. To add insult to injury the CRA can also continue to charge penalties and interest on the money you owe until your debt is paid in full. You need a plan and you need one now.

I’m sure you’ve been bombarded by the scare tactic radio ads that are flooding the air waves by a prominent tax lawyer. He’d like you to believe that he and only he can deal with the CRA and solve your tax problem; but, that simply isn’t true. Trustees are experts in solving debt issues and what you need is a professional, licensed trustee. Your trustee will present you with bankruptcy alternatives, one of which is a consumer proposal.

What is a proposal? In a proposal your trustee will work with you to determine how much you can afford to pay each month. Your trustee will then negotiate with your creditors, including the CRA, for you to pay a portion of your unsecured debt over a maximum of 5 years at a monthly rate that is affordable to you. Over 66 2/3% of your creditors ($ value, in addition to a majority in number) have to agree to accept the proposal. If your total debt, including income tax debt, is less than $250,000, then you can consider a streamlined proposal process, which is called a consumer proposal.

Will the CRA agree to a consumer proposal? Recent statistics from the CRA estimate there is currently about $8 billion in unpaid taxes in Canada. The reason that consumer proposals are almost always accepted is that they produce a better rate of recovery on your debts than if you’d filed for bankruptcy. For your consumer proposal the CRA will require that:

all outstanding tax returns are filed with CRA before they will accept the proposal
you have sufficient income to meet the payments in the proposal
you agree to make installments on your current year taxes, so that you don’t fall behind again on your taxes

Are you a good candidate for a consumer proposal? If you’re a business owner with a good cash flow and after coming up with all the deductions possible to give to your accountant you still had a large profit leading to the surprise income tax debt, you’re are a good candidate for a consumer proposal. We can also let you know why negotiating a reduction in your debt through a consumer proposal is better than a bankruptcy.

Don’t let tax debt paralyze you! Contact Ira Smith Trustee & Receiver Inc. today. We’ll create a solid financial plan for you so that you can be Starting Over, Starting Now.

Tags Bankruptcy, bankruptcy alternatives, Canada Revenue Agency, Consumer Proposal, CRA, CRA bankruptcy, income tax, income tax debt, proposal, tax debt, tax lawyer, Tax lawyer Canada, taxes in Canada, trustee, trustees