It is all too easy to get into tax debt. To end up owing the Canadian Revenue Agency (CRA) money.
Perhaps you have made a mistake on your tax return. Or have followed poor advice and ended up under-declaring. Either way, at some point, the CRA is highly likely to realize what has happened and contact you asking you to pay the money that you owe them.
When that happens, it is essential that you take the matter seriously and respond in the right way. If you do not pay them promptly, they will use other means to take the money from you. Things move quickly and it is all too easy to misstep and make the situation worse for yourself. We are here to make sure that does not happen.
The member of the Faris CPA team that will be assigned to your case, will support you every step of the way. They will explain what is happening and why you are in this situation. As well as make sure that you take the right actions at the right times.
As soon as you realize that you have, or may have tax debts, please get in touch to discuss your options and how to proceed. You may first want to read the guide below, which gives you an overview of how the CRA treats and recovers tax debt. As well as what we can do to help you to get back into good standing with the Canadian tax authorities.
Tax Debt Solutions
Like most countries, Canada has special laws that allow the Canadian Revenue Agency (CRA) to collect unpaid taxes. These laws enable them to ensure that people who owe them money use the assets at their disposal to pay their debts and do so promptly.
When you have tax debts, the CRA can move extremely quickly to recover that money. They do not need a court action to be able to collect what is owed.
Things are set up in a way that means that the penalties involved in not paying off the tax debt fast enough are high. For example, compound daily interest accrues on the amount owed and does so from the date the tax was due. It is surprising how fast the amount owed in interest grows. It is incredibly expensive, which is why our advice is to avoid incurring tax debt as much as possible.
Importance of Avoiding Incurring Tax Debts to the CRA
When you get into debt with the CRA you do need to pay the tax debt, as soon as possible. The consequences of not doing so are just too serious not to take this approach.
You need to bear in mind that the CRA has the power to:
- Seize or freeze the cash in your bank accounts
- Seize or sell your assets
- Put a lien on your property so that you cannot sell it and dispose of the funds without paying them first
- Force you to sell your property and use the proceeds to pay them
- Garnish your wages – you can find out more about how they do that by clicking here
- Garnish your other sources of income
Understandably, most people do not want any of the above to happen to them. So, we work fast when people get in touch with us and ask for help to manage their tax debt issues.
How a CPA Can Help Devise Tax Debt Solutions
As Chartered Professional Accountants, we are well-placed to put together a tax debt solution for you. One that takes account of your circumstances and uses the way the CRA´s tax debt collection system works to your advantage.
Of course, you will still have to pay what you owe. But we will guide you to make sure that it is done in a way that minimizes the negative impact as much as possible.
We do this by taking the following approach:
- Help you understand why you have received a tax debt certificate from the CRA
- Identify and discuss the best way to tackle your tax debt
- Negotiate a manageable payment plan with the CRA
- Work with you to prevent the CRA from taking other types of legal action against you
- Give you advice on how to avoid bankruptcy
- Create a long-term plan that will help you to bounce back financially
Tax debts are serious. Get a Tax Accountant who will devise a Tax Debt Solution for you.
Talk to a Faris CPA Tax Accountant today about Tax Debt Solutions
At Faris CPA, we have extensive accounting and taxation experience. For many years, we have been helping companies, private individuals, and other types of organizations to successfully manage their financial affairs.
Providing expert advice on tax planning. Including, in some cases tax debt management.
Naturally, in the course of carrying out those duties, we have built up a deep understanding of Canadian tax laws and the way the CRA works to enforce them. You can find out more about us, our experience and what we have to offer, by clicking the link.
Call Faris CPA Today to Solve Your Tax Debt Problems
Getting in touch with us is easy, here are the ways you can do it:
- Use our online contact form to conveniently schedule an assessment
- Visit our office
- Call our phone numbers
- Reach us through email
Whichever way you choose to contact us we will respond quickly. You can rest assured that we will help you to sort out all of your tax issues and do so quickly.
We fully understand how worrying having to deal with the CRA is for most people. So, we are here to support you in every way we can.
PRO TIP :
“If you can’t pay your tax debt in full, you can opt for a payment arrangement with the CRA. This lets you complete smaller payments over time until you have paid the whole debt, plus interest.”
FAQ’s on Tax Debt Solutions
What happens if you owe taxes in Canada?
There’s a late-filing penalty. However, and more importantly, if you owe taxes and are paying it off in due time, then penalties include up to 200% of taxes evaded as well as jail time.
How can I get out of my tax debt in Canada?
The simple answer is that you should file a consumer proposal with the CRA.
Why do I owe GST to CRA?
You will owe GST to the CRA if you have a tax debt or if you were overpaid the Canada Child Tax Benefit, the Universal Child Care Benefit or the Working Income Tax Benefit.
