Canadian Tax Lawyer Analysis of CRA’s Collections Powers

Canadian Tax Lawyer Analysis of CRA’s Collections Powers

Even before a tax debtor has time to react or engage a tax expert his bank accounts can be seized and money taken without a court order. This is because the Canadian Income Tax Act grants extensive powers to the CRA collection officers which often leave the Canadian tax payers baffled. When a Canadian taxpayer is assessed for Canadian income taxes owing; there is a limited amount of time within which they can file a Notice of Objection to the tax assessment if they disagree with the amounts owing. If a taxpayer fails to file the income tax Objection and has a balance owing, their file will be forwarded to a Collections Officer at the CRA.

How Collections Officers use their statutory powers

Initial collections activities begin with the Collections Officers making threatening phone calls to the taxpayer. However, if this strategy bears no fruit, there are a number of different techniques that Collections Officers use prior to using their specific statutory powers under the Tax Act. Another step which is often taken by the CRA’s collectors sometimes primarily to intimidate the taxpayer is to make in person visits to the taxpayer’s home or, in the case of a corporation, by visiting the registered offices. Section 15 of the Canada Revenue Agency’s documented Taxpayer Bill of Rights, a policy statement which is binding on the CRA, states clearly that taxpayers “have the right to be represented by a person of your choice”. Thus our experienced Canadian taxation lawyers recommend that a taxpayer speak to our professional Canadian tax consultants to negotiate with the income tax Collections Officers so that the CRA’s agents will be forced to communicate through our Canadian tax lawyer and refrain from contacting the taxpayer personally.

CRA Collections Officer’s: power to garnishee amounts

Canada’s Income Tax Act also gives the CRA’s Collections Officers the power to garnishee amounts owing to a taxpayer who has an outstanding balance on their tax account. CRA’s Collections Officers will often attempt to obtain internal documents of a business in order to determine if there are any outstanding accounts that are receivable. This has the potential to seriously damage any ongoing business relationships, and of course cash flow, so our top Toronto Tax law firm advises that professional tax representation should be obtained as quickly as possible to avoid these problems. Collections Officers can seize funds in regular bank accounts or investment accounts through the use of a requirement to pay, and do not require court authorization. Other than the techniques mentioned above the CRA also has other methods in their tool kits to enforce payment of arrears. Our Canadian Tax Law firm can give you the representation you need to ensure you are not put out of business, forced into bankruptcy or evicted from your home when unscrupulous CRA Collections Officers come calling. If you are having collections issues with the CRA, give our experienced Canadian Tax Lawyers a call and they will give you advice on your rights in any collections dispute, and ensure your rights are protected by dealing directly with Tax Collections Officers on your behalf.


How much time do I have in filing a Notice of Objection?

In Toronto, as in the rest of Canada, taxpayers have a right to redress when dealing with the federal government. That includes the Canadian Revenue Agency. In general, taxpayers have 90 days from their assessment date to file a Notice of Objection. Individual taxpayers have between 90 days from assessment and one year from the return filing due date.

Can my tax lawyer represent me in all forms of communications with the CRA?

Absolutely. When dealing with the CRA, having expert counsel at your side is an invaluable asset. In Canada, you’re allowed to authorize your tax lawyer to be your legal representative before the CRA. This enables a Toronto tax attorney to engage the CRA directly on your behalf. A Toronto tax lawyer can act in your name before the CRA in every way that you can. Contact us today if you think you need legal representation with the CRA.

Can the CRA freeze my offshore bank account?

Under certain conditions, the CRA can freeze your bank accounts without going to court or giving you notice. However, offshore bank accounts are, by definition, in jurisdictions other than Canada. Therefore, the CRA can’t directly freeze your account. In some countries, freezing accounts for overseas tax issues may be illegal. Others can be far more compliant. If you want to know more about offshore bank accounts in specific territories, contact us for a consultation.