Navigating Unpaid Taxes: A Gentle Guide Through the Maze

Owing taxes to the Canada Revenue Agency (CRA) is like dealing with a heavyweight problem – it can be tough and stressful. Unlike typical creditors, the CRA holds the power to collect through stricter measures such as wage garnishment, home liens, and freezing bank accounts.

Our team of debt relief maestros dives deep into the ins and outs of tax debts, shedding light on everything you need to know about managing your tax obligations to the CRA.

Examples of Individual Tax Debts:

  • Personal income tax debt
  • Harmonized Sales Tax (HST) owed by self-employed professionals and business owners
  • Early withdrawals of Registered Retirement Savings Plans (RRSP)
  • Director liability for payroll taxes withheld but not remitted to the CRA
  • Director liability for unremitted HST collected by the corporation

Actions the CRA Can Take to Collect Tax Debt:

  • Certify tax debt in the Federal Court of Canada and register a lien on the taxpayer’s home and other property
  • Implement wage garnishments against payroll
  • Freeze bank accounts
  • Set-off debt on income tax refunds, Goods and Services Tax (GST), Canada Child Benefit (CCB), etc.
  • Assess a director personally for unpaid corporate payroll and HST under the Income Tax Act (ITA)
  • Initiate seizure and sale action on real property and other investments
  • Issue a Notice of Assessment or Reassessment against a taxpayer “at any time” under Section 160 of the ITA for property received from a non-arm’s length tax debtor for inadequate consideration

Your Options in the Tax Debt Arena:

  • Communicate with your accountant to determine if filing a Notice of Objection with the CRA is advisable
  • Appeal with the Tax Court of Canada
  • Establish a repayment plan
  • File a Notice of Intention to Make a Proposal followed by a Proposal with a Licensed Insolvency Trustee (LIT) under the Bankruptcy and Insolvency Act (BIA)
  • File an Assignment in Bankruptcy with an LIT

Related posts