Tax Debt Relief Guide

At present, tax debt falls under the regulations of the CRA, and the agency has more authority compared to other creditors. The agency can take a number a measures, for example, it can seize money in your savings accounts and investment accounts, place a lien on your home, and more. A lot of factors can contribute to income tax debt, including cashing a RRSP, improper deductions when a large account is being closed, pensions of newly retired persons, working multiple jobs, and more.

Persons who look for information on applying for debt consolidation in Toronto often wonder if this is really possible – can you make a deal for any taxes owed? This is a possibility in certain occasions. If you owe taxes, and you cannot pay the amount if full, you may want to negotiate the terms of your payment. As a first step, you should visit an office of the CRA and explain your financial situation. When offering a payment plan, you may propose to break down a larger amount, say $1,500 into 15 monthly payments of $100. The CRA will either accept your payment plan or it will reject it and attempt to collect the taxes you owe.

Note that even if your proposal gets accepted, you are still charged penalties and interest until you repay your debt. Then, if the Canada Revenue Agency rejects your offer, they have the right to withhold GST credits and child tax credits until you repay your debt now. They can take money from your bank account and garnish your wages. As you see, tax debt is a serious matter.

The CRA does not accept payment plans that propose to pay less than the amount owed. This makes sense. If you are allowed to pay less, then everyone else will want the same deal. One option is a repayment plan where you work with the Canada Revenue Agency and a second option is to consider government programs such as the former CRA Fairness, now Taxpayer relief provisions. Under this program, the CRA can accept late-filed, revoked, and amended tax elections, waive penalties and interest, and offer income tax refunds. The latter is possible beyond the three-year period that is allowed, but only for testamentary trusts and individuals.

The Canada Revenue Agency makes this possible because there are cases in which the taxpayers face unforeseen events that prevent them from meeting their tax obligations. These circumstances include natural disasters such as floods and fire, personal misfortunes, such as death in the family and sickness, incorrect information and error by the CRA, and service disruptions like strikes.

When would the CRA cancel penalties and interest? This is possible when human-made and natural disasters occur, as in the case of fire and flood. A second category includes sickness and serious accidents, including emotional and mental distress. Finally, disruptions in services and civil disturbances are a third category. The CRA also cancels penalties and interest when they result from the agency’s own actions, such as processing errors as a result of which people are not aware of certain obligations. Selecting a good payday loan in Toronto solution can be hard, to make informed decision online fast loans application.