Tax Debt You Can't Pay
Because the CRA has the benefit of special laws concerning unpaid taxes, owing money to them presents a different set of problems than owing money to an ordinary creditor. When recovering its dues, the CRA can use a series of options, like garnishing your wages, imposing tax liens, seizing money, freezing your bank account, or seizing your assets and selling them.
Unlike ordinary creditors, the CRA does not need a court order to garnish your wages. When you owe money or have unpaid taxes to the CRA, compound daily interest accrues from when the amount was due. The CRA charges interest on penalties starting on the day your return was due. If you don’t file tax returns on time, the CRA imposes a 5% penalty on the complete balance owing plus 1%, up to 12 months, on the full balance of the late tax return. The penalties and interest for repeat offenders are much more server.
If you didn’t file your return because unforeseen circumstances, such as severe personal problems or natural calamities, you may be able to avoid paying interest or penalties by asking for Taxpayer. Faris CPA can help you determine whether you may qualify and, if you do, present your case to the CRA.
If you’re thinking of securing a CRA payment plan, or fear the CRA is about to seize your belongings, call one of our experienced and trusted tax advisors for help.
Call us today at for a Confidential Initial Assessment about any accounting or tax matters. As an experienced, certified, licensed, and expert tax accounting firm we help our clients handle all tax and accounting issues. Give us a call today at 1 844 340 5771.
Sam Faris is a Toronto-based Chartered Professional Accountant who practices as an independent consultant on high-level Canadian tax matters and handles disputes with CRA. He has recently published an article a business magazine: HERE