9 out of 10
9 out of 10 Canadians do not have a debt to CRA because they pay their taxes on time. Beginning in February every year, people who not only have too much debt on their credit cards right after the Holidays, but they also owe income taxes, consult us.
We have written on the topic before, including:
- CRA: TAX RETURN FILED BUT NO MONEY TO PAY?
- TAX problems with the CRA? CONTACT A TRUSTEE!
- CANADA REVENUE AGENCY SOCIAL MEDIA
- VAUGHAN BANKRUPTCY TRUSTEE WARNS OF DANGERS IN TAKING FREE TAX ADVICE
- THE TAX LAWYER; EVEN A HIGH PROFILE TAX FIGHTING LAWYER HAS TO PAY HIS INCOME TAX
Their cute animated video
Do you have a debt to tax authorities? Do you owe taxes or other government amounts like overdue student loans, or EI and CPP overpayments? If so, the Canada Revenue Agency says it wants to help you get back on track. They tell you that paying what you owe to them is easier than ever with a variety of online payment alternatives. And if you can’t offer the full amount right off, they tell you that they can work with you to set up a payment plan that would allow you to make payments over a term.
Michael’s nice story
The tax collectors then tell you a nice story. Take Michael for instance. He has an indebtedness with and he can’t pay the full amount right now. On their website, he was able to set up a monthly pay plan to pay his debt to them. Michael was also happy to pay interest on his debt to CRA until it’s paid off.
This is such a nice sounding story. However, based on the people who consult with us over their debt to CRA, it ignores the fact that people with too much debt do not have the money to pay off their debt to CRA and their other debts. The people who consult with us want to pay off their debt to CRA, but can’t. Life has gotten in their way!
The real story
If you owe money to the CRA and you’ve been contacted by the CRA about it, collection acts could be underway. Shunning your indebtedness will not make it easier for you. By working together with the CRA as early as possible, you can hopefully avoid legal and monetary penalties.
However, there are issues in dealing with CRA directly and pitfalls to avoid. Here is our top list of things to be aware of:
- The CRA collector does not have the authority to agree to accept a lesser amount than what you owe. The collector can only agree to you’re paying off 100% of the tax, penalty and interest you owe.
- The CRA collector will be looking for you to pay off the full amount in a relatively short period of time; say, 6 months.
- The CRA collector has a lot of information t his or her fingertips. After all, you have provided CRA with very personal information for many years!
- The CRA collector will try to get updated financial information from you such as the identification of your bank accounts, current employment, do you own or rent, if you own, what mortgages are against your property. The reason for this is so that if you fail to reach a payment plan, or default on your payment plan, then they will try to garnish and seize your cash, wages and other assets. It is a lot easier for them to do so when you have already told them where to look!
What should you do if you have too much debt?
So if you can’t get some peace of mind by joining the 9 out of 10 Canadians who sleep easy knowing that their taxes are in order and their tax indebtedness has been paid – contact us. The Ira Smith Team has helped many individuals and corporations avoid bankruptcy and settle their debt to CRA for less than the full amount owing. Here is a little known secret – the only way CRA will accept less than 100% is if you are working with a professional licensed insolvency trustee in a debt restructuring proposal.
Starting Over, Starting Now, we can help you get squared away with CRA and return you to living a productive stress-free life. Call us today for our free consultation.
