What if you can’t pay your taxes??
Do you owe taxes and can’t make your CRA payment? A Licensed Insolvency Trustee can provide real relief from tax debt. We can include income taxes, GST / HST, source deductions, overpayments and other government assessments when helping you with a plan to get out of debt. Government debt is treated the same as credit cards, lines of credit and other unsecured debts.
A tax accountant or tax lawyer may be able to help you correct an error in an assessment or maybe get some relief from penalties and interest, but they can’t reduce the amount you owe. The government will only consider accepting less than full CRA payment if you file a proposal or bankruptcy with a Licensed Insolvency Trustee. Debt consultants (also known as debt settlement companies) can’t help you with your CRA payment.
Why do you need a Licensed Insolvency Trustee? Stop and think about it from CRA’s point of view. If it was as easy as writing to CRA to tell them your story to get a reduction in your debt, everyone would try it. When you file a consumer proposal with a Licensed Insolvency Trustee, we are required to fully investigate your situation and report to CRA and other creditors. They put faith in our report because we are licensed and supervised by the Office of the Superintendent of Bankruptcy. You have to make full and complete disclosure to the Trustee and the Trustee must verify your information. We have to recommend the proposal to the creditors and ask them to vote in favour of it.
Many people, especially those that are self-employed, owe income and other taxes and are afraid to file their returns if they don’t have the money to make the resulting CRA payment. The problem doesn’t get better with age … it is better to file your returns and tell them what you owe than wait until they decide how much it is. If they estimate your taxes with an arbitrary assessment, the amount is likely to be on the high side and serious collection action will soon follow including wage garnishment, direct notification of your customers, seizure of bank accounts, and liens on your house.
If CRA has already registered a tax lien on your house or other property, don’t assume there is nothing more you can do. As part of the proposal or bankruptcy process, CRA will consider how much equity you really have in your house and may accept less than the registered amount of the lien or remove it completely. We can also stop garnishments and other seizures. If you have received a “Requirement to Pay” or a “Notice of Tax Lien” … call us. We can help!