Are you seriously behind on filing income tax, GST or payroll tax paperwork and payments? If so, proceed with caution. Canada Revenue Agency (“CRA” – formerly known as Revenue Canada) has immense power to enforce the collection of tax debts through the seizure of assets – and it can be done without a court order.
CRA can freeze your bank account, grab your wages, intervene and seize payments from customers and register a lien on your home. All of these scenarios are stress-inducing and the stuff of nightmares if you run your own business.
Unfortunately, whenever someone runs into problems with CRA, their first impulse is to turn to a tax lawyer or a chartered accountant for help. You may even have seen some of their advertisements – they all promise to help resolve your crippling tax debt and make the tax man go away. In reality, these lawyers and accountants can only assist you with the interest and penalties accruing on your tax debt, not the actual debt itself. Lawyers and accountants are not licensed under federal legislation to provide the protection that can lead to a reduction or elimination of the principal debt.
Luckily, the same federal government that gave CRA their strong powers created equally strong laws that allow the honest, but unfortunate, debtor (company or personal) to be protected from all their creditors – including the dreaded tax man – through the assistance of a Trustee in Bankruptcy.
So, in a world where the only certainties in life are “death and taxes”, I propose a third option – eliminating or reducing the tax burden. If you are dealing with crippling tax debt, learn more about how your stress and your tax debt can be eliminated with the help of a licensed Trustee. And remember: Bankruptcy is not the only option available to you. A settlement offer (known as a consumer proposal) can often help keep CRA happy and provide you with an orderly repayment schedule for your tax debt.