When there is a tax owed to the CRA, it is very likely that they are going to do all they can to collect.  They have a great many ways to get the money back and one of these is CRA Income Garnishment. Many people are surprised to find out that they are going to have money taken from them as when this is the way that the money is to be returned, there is no need for the case to go to court. The good news is that it will not mean you being sued, but the bad news is that you don?t get a lot of notice when the money is about to be taken from you.

With CRA Income Garnishment, there is already an allowance in the Canada Revenue Act that allows the recovery to begin. It should not be a surprise to you to find that the money has been taken from your salary if you owe tax, as there is nothing that your employer can do to stop it happening. Once the request is made to them they have to comply.

Before CRA Income Garnishment begins, you will be made aware that there is a problem with what you have paid in the past. You will be contacted by the CRA on a few occasions and each one you receive will escalate the problem and bring you nearer to the time when you will be subject to CRA Income Garnishment. In the first instance, you will be made aware that you owe tax, and this may or may not be news to you. If it is you will be well advised to contact a firm of professionals who will be able to look into the case for you. After this you will get a second letter and this will tell you that you need to pay the full amount. If you still do not pay the amount a third letter will arrive and this will be the final notice.  If the case is still not resolved, you will receive the fourth letter and this will advice that CRA Income Garnishment will soon start.

The best thing to do when the first letter arrives is to deal with the issue right away. It is possible for all your salary to be taken until the tax is repaid and clearly this is not a position that anyone would want to find themselves in. Very often it will be the case that the reason the bill is there is because it cannot be paid. A professional will be able to tell you what the options are. It is possible to have CRA Income Garnishment stopped and it is the professional who should take a good look at your situation.

Your main options to stop CRA Income Garnishment are to either get together the full amount and pay it off or if this is not possible start a tax repayment plan as this is likely to take less of your salary each month.

There are often times when a taxpayer has a huge tax owing which he is unable to pay. This can also be a result of years of accrued interest on your original tax amount. Many times tax amount keeps on growing through time and turns up in a huge amount which you are unable to pay. Some people sighting this case and prepare filing of tax returns as they know the monster of the tax owing will soon grow out of their control. Once this monster gets out of control what you will be facing is a financial crisis and what you will be doing is preparing for a tax payment plan.

The tax owing is owed once an individual files returns. Inability to pay tax owing results in serious financial troubles. In order to escape legal actions people go after devising a tax payment plan, however designing this plan directly with the CRA can spell DOOM for you. This is so because not only will the CRA attempt to consider and accept a short term tax payment plan from you, they will also always want disclosure of significant financial information. This information can include where you live, work and where you bank. These details are taken in an attempt to be used later after your tax payment plan expires. If you miss any payment again thereafter, CRA using the prior information, attempts to enforce action on your bank account, home, and on your income using it to force the taxpayer to pay the entire tax owing.

The best way to handle this situation is to consult tax expert such as Tax SOS who can efficiently design a tax payment plan for you and negotiate on your behalf with the CRA.  Our experts are also able to host financial resources for those who require financial relief in wake of paying off their tax owings.

Also when it comes to devising a tax payment plan it is also recommended that you should never agree to pay a monthly amount that you cannot afford. Doing such a thing will only add up to your problems. In case of failure to pay the agreed amount monthly, serious actions can be taken by the CRA in form of income garnishments. This refers to the CRA taking over your bank account and deducting the decided amount monthly to collect all due tax owing from its taxpayer.

Hiring the services of tax experts will help you devise a tax payment plan that is workable for you and will also ensure that the clients are least exposed to the CRA. Remember it is necessary to devise a sound tax payment plan as anything wrong in this initial step may mean losing the battle for ever and even before you started it. Failure to pay taxes can result in serious consequences and promising payment on a schedule and still failing to do so will lead to even worse repercussions.

Summary

Tax payment plan is the option taken by taxpayers when they are unable to pay all their taxes in full. Tax payment plan helps individuals to pay their taxes off in installments however devising a proper plan is necessary as failing to pay the installments according to the devised plan can result in garnishments of wage or income.

Do you understand the process of garnishment? It is a legal procedure where a creditor may require a third party to turn over the bank accounts or the wages of the taxpayer. When you miss paying your taxes by CRA deadlines, you may face an CRA income garnishment. It allows CRA to seize your wages legally. It can also garnish all the money you have in your bank accounts or other assets that you may own until your tax owing is repaid in full.

A court order is not always required when it comes to an income garnishment. There are two distinct situations where a court order may not be required for income garnishment. The first situation is when a person assigns his or her wages to a credit union body. The second situation is when a person owes taxes which are unpaid to the CRA. In such cases, the CRA has the right to caution your employers directly and require the wages to be garnished.

When does the case of a wage levy arise? A wage levy is almost like an income garnishment. This action can be enforced and initiated by the CRA against a person for back taxes. In the case of  income garnishment or a wage levy, the employer will receive the garnishment order notice. The employer is clearly required under the law to keep back the amount which has been specified in the garnishment order from the wages of the tax taxpayer.

In Ontario, the maximum amount of your wages that can fall under income garnishment is half of your gross monthly salary as per the Ontario Wages Act. Under this Wages Act, the social assistance, employment insurance and the pension payments cannot be touched under garnishment. This just cannot happen even if the funds are deposited into a specified account at particular financial institutions.

To handle a CRA income garnishment, you need professional help from a tax representative in order to stop a wage levy or a garnishment. You will be protected if you have an owing solution that is legally binding and which comes under the protection of the tax courts. People have two options to annul a CRA income garnishment so that all future activity pertaining to collections may be prohibited. The first option for an income garnishment to be revoked is to declare bankruptcy. The second alternative  is to go the route of the consumer proposal. In this case, all the assets that you have are confined for repayment in order to reduced the amount you owe over a period not exceeding five years.

Some professional tax consultants negotiate with the CRA on your behalf and come up with a payment plan that may be fair to both sides and one which is within your payment capacity. A payment plan can be worked out with low monthly payments to avoid a CRA income garnishment .

When the CRA is notified that the collection of a tax has become overdue, they may then file a tax lien. This lien may be attached to the taxpayer?s property. This lien can limit the taxpayer?s rights to has to his or her property. This is applicable to real estate, personal effects or bank accounts. CRA collection in Toronto or in any other cities in Canada could enforce a tax levy which could involve seizure of property, bank accounts and even the taxpayer?s wages. The CRA has the right to garnish half the taxpayer’s income from the employer and up to one hundred per cent of any additional sources of income that the taxpayer may have.

People who need help with their tax issues have several options. One of them is to employ the services of a tax attorney or law firm. Another option is to get the help of certified public accountant. Tax lawyers are good negotiators and the tax accountants are knowledgeable in all tax matters. There are certain firms that provide to the Canadian taxpayers full expertise of both professions while offering the additional option of tax representatives. These tax representatives are people who have got prior experience working in the capacity of CRAtax agents.

This combination of expertise can help the taxpayers in most cases involving  CRA collection in Toronto  or in any other cities in Canada. They may also be able to get the total tax amount reduced for the taxpayer. They have the capacity to dispute all unfair assessments and negotiate a favorable  Toronto CRA tax payment plan.

The CRA has been given the responsibility of all collection activities by integrating the collections for the government. These activities were previously handled by Human Resources and Social Development Canada.  This includes all tax owing that have been incurred through Canada Student Loans, Old Age Security, Canada Pension Plan, Employment Programs and Employment Insurance.

The CRA was chosen for the collections function because of its previous experience collecting a whole range of taxes for the federal government and the provinces. It also collected premiums for many social programs. The CRAdraws on its current infrastructure for its CRA collection. It brings expertise and a capacity to support the administration while integrating the collection operations of other departments.

CRA Collection in Toronto or other cities involves both automated and manual procedures to retrieve outstanding tax liabilities. Some of the procedures the CRA uses are letters generated by computer, field visits, telephone calls and legal actions.  CRA collection in Toronto  or other cities act through the Revenue Enforcement Management Information Tracking System. This is a national call center for collections. It is placed at eight locations and collects two account pools nationally; they are general sales tax and personal tax. The complexity and the size of the outstanding tax amount will influence the collection mode that is likely to be used by the CRA.

The Canada Revenue Agency collects various types of taxes. These taxes are income tax, GST/HST, and payroll taxes. The jurisdiction of  CRA collection  does not include provincial taxes such as gas taxes, property, or municipal taxes. CRA has contractual arrangements with certain provinces to help in collecting their provincial program outstanding dues. An example of such an arrangement would be when CRA will use refunds on personal income tax as adjustments against outstanding taxes to benefits programs of selected provinces at the request of that particular province.

CRA collection’s responsibilities

CRA collection  is responsible for most individual income tax brackets in Canada with the exception of those residing in the Province of Quebec and Alberta. CRA administers the tax collection procedures from the majority of provincial corporations in the country.

CRA collection  is also responsible for the Goods and Services Tax in all the provinces with the exception of Quebec as Revenue Quebec manages the collection on its own. It also collects the Sales Tax and the GST on behalf of CRA. When it was introduced about twenty-two years ago, the GST was fixed at 7% as add on to the value of goods and services, but it was reduced to 5% a few years ago.

In few provinces, the Goods and Services Tax has been transformed into the Harmonised Sales Tax. These provinces are British Columbia, Newfoundland, Labrador, Nova Scotia, and Ontario. The HST blends both the GST and the provincial sales tax into one category. HST is administered by CRA.

The expectations of CRA collection

CRA collection  practices make it clear to the taxpayers that they have to honor the payment of taxes upon receipt of the Notice of Assessment by the thirtieth of April of a calendar year for the previous year?s assessment.  CRA collection  authorities expect all taxpayers to file their income tax returns and settle any outstanding balances that have been carried forward from the previous years.

To ensure fair practices and equitable allowance to all the tax collectors under the self-assessment system, CRA collection uses stringent measures to make sure that the taxes are paid on time. CRA collection tends to take a firm but effective approach to collect all outstanding account from the collectors who have not paid their taxes. Every reasonable effort is put in to enforce the collection deadlines.

The Procedure of CRA collection

In situations where the outstanding balances are not cleared within a month?s period from the date when the Notice of Assessment has been issued, a provision is made to issue a second notice request for the owed balance by means of telephone contact. If the balance still remains outstanding and there is no arrangement or discussion about payment of the tax dues, then a final notice is issued to the collector. If there is no sign of the payment coming in within ninety days from the date of the Notice of Assessment, then legal action is pursued by the CRA collection.

The taxpayer?s income will be garnished. This means that the CRA collection agencies may intercept funds receivable by the concerned taxpayer and in certain cases, the sheriff of the province may be directed to seize and liquidate the personal assets of the defaulters. The final CRA collection will include the interest charges on the balances that have remained unpaid.

If you have tax debts issues and have CRA collection agent going after you, delay no further, ask experienced tax consultants in Tax SOS to help at 1-877-982-9767.

When tax payers are seeking answers to the problem of tax bills which are outstanding, CRA (Canada Revenue Agency) allows them to make deals detailing a schedule of the tax payment plan. The CRA will always be willing to accept a reasonable monthly installment tax payment plan.

In the absence of a tax payment plan, there is a possibility that the taxpayers will have to be ready to face CRA garnishments on their wages. There are many Canadians who have their wages garnished every year by CRA. These garnishments take place when a tax is owed and there is no submission of a tax payment plan to the CRA. The wage garnishments will also occur if CRA gets your tax situation assessed through a notional assessment and provides evidence that the tax will not be paid within the financial year.

The CRA does not need to get a court order to execute garnishments on your wages unlike other creditors. Salary garnishments are directives to the employer to hand over a certain percentage of the taxpayer?s wages to the CRA. This can be done without the need for informing the taxpayer. The percentage limit is generally about a maximum of fifty per cent of the wages. This could have an impact also on other sources of income such as rental or sub-contractor?s earnings. The additional sources could be garnished in full amounts.

This is not a healthy situation for tax defaulters as apart from causing further financial hardship, it can result in embarrassment in both personal and professional lives. When your employer is served CRA garnishments, it is humiliating and reduces your reliability even in the eyes of your employer.

The Consumer Credit Protection Act has come out with a protection clause for the defaulter where he or she cannot be dismissed from employment on account of the wages being garnished. The employer has a right to terminate employment if the garnishment has been done more than once.

The tax defaulters could take the help of tax consultants to get a reduction in the CRA garnishments and sometimes they may be successful in getting them removed totally. The complete solution lies in coming across with a tax payment plan and not in bits of evasion. It is wiser for the defaulter to get in touch with the tax consultants as they will be able to negotiate with the CRA on your behalf and work out a tax payment plan that may be reasonable and fair and one that is within your financial capabilities.

You may be able to negotiate with the CRA on a personal basis, but a good tax consultant will be able to contribute out of his vast experiences in working out negotiations with the CRA agents. The tax consultants are invariably successful in working out a tax payment plan that includes arrangements of monthly payments of lower value. They may be able to work such arrangements out with lower interest charges and also without any additional penalties.

Call tax consultant team at Tax SOS team right away if you have received notice from CRA about potential legal collection actions at 1-877-982-9767.