Many Canadians find themselves in a position where they cannot pay their Extraordinary Tax Debt or income tax debt to Canada Revenue Agency (“CRA”).
CRA has to look to the federal Income Tax Act to be able to negotiate payments. The options include payment arrangements and taxpayer relief.
A payment arrangement is an agreement between you and CRA to make smaller payments over time until the debt is paid in full including interest.. You will first have to show that you have tried to pay your debt in full by borrowing money or reducing your expenses. You will have to provide proof of your income, expenses, assets and liabilities to CRA. CRA can take further legal action against you if you fail to make a payment or have unfiled tax returns.
Be forewarned that by providing this information to CRA, you are giving them the information needed to take swift legal action against you should you not be able to comply with the negotiated terms.
In some circumstances, you may be able to ask for relief from the penalties and interest charges and reduce the overall amount you or your business owes. Click Here to learn more:
For those who cannot pay their tax debt and cannot qualify for or manage the payments under either program above, you may wish to consider the options under the Bankruptcy and Insolvency Act which include proposal and bankruptcy. This legislation allows a business or an individual to compromise their income tax debt including the principal, interest and penalties (in some cases, Source Deduction debts and Goods and Services Tax/Harmonized Sales Tax are treated differently).
D. Thode & Associates Inc. and its Licensed Insolvency Trustees can explain each option to you and how they would work given your unique set of circumstances.
Your safety is very important to us during this time and all meetings are available by telephone or video conference. Contact us today for a free, no obligation consultation.