income tax debt Archives - Page 2 of 2 - Ira SmithTrustee & Receiver Inc.

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.

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.