Tax lawyer Canada Archives - Ira SmithTrustee & Receiver Inc.

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.

Are you experiencing tax problems with the CRA? If you are burdened with serious debt and tax problems, the CRA may be only one of several creditors that you have to deal with. Although you may be bombarded with advertisements from tax lawyers trying to scare you into believing that you need a prominent tax lawyer in Canada to deal with CRA debt, consulting with a trustee may be a much better option for you. The CRA isn’t looking to prosecute you; they are looking to collect money and a trustee is usually your best option for dealing with debt.

Why use a licensed trustee instead of a tax lawyer? A licensed trustee can:

Provide you with a full financial appraisal of your situation, including your tax problems leading to CRA debt
Deal with all of your debts while a tax lawyer only deals with your CRA debt; the rest remains
Advise you on bankruptcy alternatives which include credit counselling, debt consolidation and consumer proposals in dealing with the tax problems and related debt
Provide immediate protection with a stay of proceedings by filing a consumer proposal or an assignment in bankruptcy
Advise what amounts are payable under the statute
Be less expensive than using a tax lawyer because in many cases the trustee doesn’t charge a fee over and above what the statute requires to be paid
Save you money because the actual amount required to settle may be higher than what debts could be settled for in a bankruptcy or consumer proposal
Offer you a free consultation while a tax lawyer requires a sizable retainer

There are a few cases in which you may want to consult a tax lawyer in Canada:

Your debts chiefly or only involve CRA
You are not insolvent
CRA has registered liens on your property (bankruptcy does not remove liens)
Communication between you and your tax lawyer is privileged; a trustee must seek and make full disclosure
You can avoid a bankruptcy filing and use the “open kimono” on all of your conduct and transactions
You are being prosecuted by the Department of Justice in relation to your tax reportings and therefore do require a lawyer

If you’re experiencing serious debt issues, including tax problems with the CRA, contact Ira Smith Trustee & Receiver Inc. for a no cost, no obligation consultation. Take the first step towards living a debt free life Starting Over, Starting now.