With this year’s tax deadline long gone, for many individuals, the stress that comes with income tax filing is also long forgotten. However, if you are one of the many Canadians now stuck dealing with a tax debt, the stress may just be in its infancy, growing exponentially as the days pass and interest continues to accumulate. How well do you know the Canada Revenue Agency collections policy?
Of course the Canada Revenue Agency has a right to their money, but that does not mean that you don’t have rights as a taxpayer. The CRA is a very powerful organization, and often that power means intimidation and fear - just know that you do have rights and can fight the CRA if you so choose.
Taxpayer Bill of Rights. This is a set of rights established to protect the taxpayer when it comes to things like language, privacy, harassment, objections, etc. For example, if you feel as though you are being unfairly treated, you are able to file a formal complaint under the Bill of Rights. Intimidation is a tactic that often works, but largely because people are unaware that avenues for recourse exist.
Here is a link to the CRA website and the Rights in their entirety: http://www.cra-arc.gc.ca/rights/.
Additionally, when it comes to a tax debt, individuals are often not aware of the programs that exist to help fight CRA collection action, actions such as a wage garnishment, frozen bank account, or property lien. These collection actions can cause extreme financial hardship and getting them lifted can be a challenge. Some of these programs can also stop interest and penalties. For example, the Taxpayer Relief Program or even the Voluntary Disclosure Program may give you the chance to deal with what you believe are tax debts leveraged as a result of personal circumstances which prevented you from filing or impacted your ability to pay.
Just remember, any negotiations you enter into directly with the CRA can have negative impacts long term; often in exchange for a repayment plan the CRA will require personal information, information that will later be used against you! The CRA will never voluntarily negotiate to reduce principal, and typically this can only be achieved through a consumer proposal or bankruptcy.
If a CRA tax debt has you feeling anxious and overwhelmed, our advice is NOT to call directly to negotiate, but rather to speak first with a debt counsellor with the experience and knowledge that will help you protect yourself. Call DebtCare Canada today at 1-888-890-0888.