Get expert Canadian income tax lawyer analysis on CRA’s Tax Collections Powers
The powers given to CRA’s Tax Collections Officers often take Canadian taxpayers by surprise because Canada’s Income Tax Act gives the CRA’s Tax Collections Officers extensive powers to collect income taxes owing. CRA’s Tax Collections Officers often start their initial collection activity in a similar manner as that of private collections agencies by making phone calls to the taxpayer. Sometimes the CRA’s Tax Collections Officers also make in person visit to the taxpayer’s home or registered offices in case of a corporation. This strategy is mainly intended to intimidate the taxpayer and remind them once again of their outstanding tax debts. At this point every taxpayer should remember that they have the right to be represented by a person of their choice as per the CRA’s documented Taxpayer Bill of Rights which is binding on the CRA. Rather than speak to a tax collection officer on your own, contact one of our Canadian income tax lawyers to speak to the CRA on your behalf.
If the above mentioned strategy does not get any result then CRA’s Collections Officers have the power to garnishee amounts owing to a taxpayer who has an outstanding balance on their tax account, including salary payments. In order to determine the existence of any outstanding accounts receivable the CRA’s Collections Officers can obtain internal documents of a business. Our top Toronto income tax lawyers should be contacted immediately to avoid damage to ongoing business and cash flow. Other collection methods include RRSP seizures or bank account seizures. When these steps do not settle a taxpayer’s debt with the CRA, the CRA’s Tax Collections Officers, without giving a notice to the taxpayer, can go to the Federal Court of Canada and register a certificate against the taxpayer for the balance owing including penalties and interest. This certificate allows the CRA’s Tax Collections Officers to take further legal action.
The CRA’s Collections Officers, in order to enforce payment, can proceed with greater enforcement methods like putting up any personal property of a taxpayer on auction or by placing liens on the taxpayer’s property until the balance is paid in full. A taxpayer is usually given a period of 90 days to make good on any debt stemming from a tax assessment before giving the file to a CRA Collections Officer. CRA’s internal policies also place other restrictions on its collection powers to avoid escalation of legal action when a taxpayer has negotiated a mutually accepted payment arrangement. The exception to these restrictions on CRA collection powers is that if the CRA feels that its ability to collect the amounts owing will be placed in jeopardy due to the 90 day restriction period the CRA Collections Officers can take legal action to secure the debt as per the jeopardy collections provisions of the Tax Act. Our expert Canadian income tax lawyers will solve your collection issues with the CRA and will give you advice on your rights in any collections dispute to ensure that your rights are protected. Contact our expert Canadian income tax lawyers to get the tax representation you need before the CRA Collections Officers come calling.
“This article provides information of a general nature only. It is only current at the posting date. It is not updated and it may no longer be current. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in the articles. If you have specific legal questions you should consult a lawyer.”