If you have not paid your taxes and not negotiated a delayed payment plan with CRA, it can take steps of enforcement against you such as CRA income garnishment. The CRA does not even need to go to court for that. This is a big power that has been vested in the CRA. Any other creditor has to arrange a court order before he or she is able to take any enforcement action against you.
The CRA does not require giving you any warning or procuring a court order to go after you. The first step in the enforcement plan is to impose CRA income?garnishments. Once the income?garnishments are enforced, there is not much you can do to lift that enforcement by yourself. You could be in severe financial hardship or your business may struggle. It will not matter at all as CRA will go through with the enforcement.
It is always wiser to allow a professional?tax consultant to handle your tax filing and related cases. The?professional?tax consultant?will be able to negotiate, as a routine, any removal or reduction of the enforcement measures. The CRA is entitled to impose income?garnishments up to fifty per cent of your earnings and up to the entire amount of a sub-contractor income. This can result in a major financial disruption and can cause plenty of damage to a business organization.
Your bank account also could be frozen in additional to CRA income garnishment. When the Canada Revenue Agency freezes your bank account, they will send you a letter which is known as `Requirement to Pay’. This letter indicates the amount of tax owed and the terms of payment. The letter will also direct your bank, through a copy, to freeze your account. Your funds will be then held as frozen for a selected time period and then forwarded to the CRA. This will leave you totally stranded as you will not be able to pay your bills nor will be able to conduct your business.
The professional tax consultant?will be able to help you lift this CRA income garnishment. If you have assets in the form of property, the CRA can also register a lien against your property at any time they so desire if the taxes are not paid. You will not be able to sell your property or get your home refinanced until you have taken care of the lien and resolved your tax issues as all current mortgage holders will also be informed of the lien.
The CRA can use more than one enforcement action against a tax payer. If a tax payer owes larger taxes, in addition to CRA income garnishment, the CRA could also freeze the bank accounts and also place a lien on the tax payer’s property. Therefore, it is better to organize your paper works and take the help of tax consultants in planning out your tax payments. The tax consultant?will help you take advantage of various rules that are updated on a regular basis to enable you to stay feasible under your tax payments or those payments into the next assessment period.

There are Canadian individuals and groups who feel they do not have to file a tax return or pay taxes. This myth comes from a group of people who convinced the public that for a payment they will give them the information that proves they don’t have to pay taxes. They are taking advantage of the misunderstanding of the individuals that are confused about the tax laws.

Canada is a free and open democracy and every citizen has the right to protest any part of the Constitution and they are free to express their opinions. The Canadian Revenue Agency (CRA) is worried that the individuals who have been fed lies about the laws are now confused and don’t really understand the tax laws at all. This could cause fines, penalties and possibly prison time if they go too long without paying taxes. All Canadian citizens must abide by the Income Tax Act.

The people profiting on the misunderstanding of the Income Tax Act keep the material of lies flowing to people to make money. They themselves probably pay their taxes and file returns, but they are convincing other individuals they have a choice not to. If you have any questions, check with a professional tax accountant or the CRA. Don’t let someone charge you to get you to break the law. It is time that you learn the truth about the Income Tax Act Myths and the Facts. Hopefully the people who read this will get the answers in their case from a professional.

If you find that you have been wrong and have not paid taxes or filed a tax return for a long time there is hope for you, but you have to act on it and take the opportunity you are being given. The government has created a program called the Volunteer Disclosure Program. It would be best to get advice and help from a tax professional when contacting the CRA. All a citizen has to do is contact the CRA admitting that they have not been paying taxes or filing tax returns for a long time. They can do this without the worry about penalties or prosecution. The sooner you take care is best for you. The CRA could become aware of you not paying taxes and then you could be looking at prison time not just the taxes, penalties and fees.

The CRA is hoping that many people who have not paid their taxes will use the program to come clean with them and make arrangements to pay the past taxes. Many Canadians have been misled. This article is for the people who were just doing understand the Income Tax Act and the ones who were deliberately misled by others to profit.

Myth #1

If a person doesn’t cooperate with the employee taxes of the CRA they can force them to lower their taxes or eliminate them completely.

The Facts

The CRA enforces and administrates the tax laws that are passed by provincial legislation assemblies and Parliament. The CRA does not have the Ability to eliminate, lower, nor have any say in how the money will be spent once they collect it.

Canada has a parliamentary system under which new tax laws and changes to the laws are made by the Department of Taxation under the direction of the Minister of Taxation. Changes in taxation are put in fron of Parliament in the form of legist ration. The House of Commons and the Senate must pass a law for it to become law. The CRA also collects taxes passed by the provincial legislation assemblies.

The CRA and its employees are subject to the law. If you feel that they have failed to respect your rights or have acted without authority you have a right to address the issue with the courts.

Myth #2

The Income Tax Act only applies to corporate entities not human beings. The Common Law rights going back to Magna Carta makes all taxes on citizens voluntary.

The Facts

The court rejected these myths. On August 31, 2000, the Ontario Supreme Court of Justice issued a ruling that the Income Tax Act did include persons. The judge found that in s. 248(1) that the Income Tax Law did include both a natural person and an entity other than a person. He said that it also stated that the applicant is a person and a taxpayer. All persons were obligated to file income tax returns and pay taxes. The judge also found that no where did it state that paying taxes were voluntary.

A number of groups of people are promoting the idea that it is legal for a person to declare they exempt form taxation. Believing those individuals could cost taxpayer penalties, fees, the original tax, and imprisonment. An individual needs to consult a professional in taxes or the CRA if they have any questions about any information that they have heard from others.

Myth #3

Some individuals say they are exempt from GST/HST and they have a card to prove it.

The Facts

The GST/HST legislation does not state that there is any individual allowed to be tax exempt. If a person’s status is Indian they may be tax exempt from paying GST/HST taxes under certain conditions under the Indian Act. Any card that a person has is a fraud.

Myth #4

A person can make tax-free withdrawals for their self-directed RRSP.

The Facts

If a person uses any part of their Registered Retirement Savings Plan (RRSP) it becomes taxable income. There are people who run schemes that will tell you that you can use part of your RRSP to purchase stock in a private company and then they will loan it back to you at a low or no interest loan. Once you use the RRSP funds they become taxable income.

Myth #5

The CRA sends emails to conduct e-audits.

The Facts

The CRA does not use email to inform you of an e-mail. There is no such thing as an e-mail. The person sending the email is running a scam to get your personal confidential information most likely for use in an identity theft scam. Do not ever give anyone your confidential information unless you know who they are and there is a purpose. The CRA wouldn’t ask you for that information in an email.

Myth #6

Winners of the lottery or sweepstakes in Canada have to pay fees and taxes to the CRA before claiming their prizes.

The Facts

When someone wins the lottery or sweepstakes in Canada, they do not have to pay any fees or taxes. If you get any email saying you have won an amount of money, but you have to send fee to get, you should call the police and the Royal Canadian Mounted Police. It is scam.

There are groups of individual in Canada who believe that citizens can lawfully not file an income return. Like always, there are those that are trying to make money because of the misunderstandings they caused encourage about tax laws. These groups are profiting from confusing individuals with tax myths. Some Canadian citizens confuse the right to their opinion on the constitution and taxes as the right to make their own decision on whether or not to pay taxes and file tax returns. It concerns the Canada Revenue Agency (CRA) that these individuals are putting themselves in a position of legal and financial problems. All Canadian citizens must follow the Income Tax Act laws as well as all other tax laws.

Many people have been confused about what is true about taxes and what tax myth is. ?The following are some common tax myths that are commonly referred to in some tax sheltering or questionable tax schemes that have been cracking down by CRA.

Myth #1

In a 1950 the Canadian Supreme Court decided that the federal tax was unconstitutional. Therefore, a person can legally not pay income taxes to the government.

Facts

This myth came from a misrepresentation of the Canadian Constitution giving the provinces the direct power of taxation. In the Constitution, Section 91 gives the federal government the power to collect money by any means necessary including taxation. Section 92 gives the provinces the power to enact direct taxes to add revenue for provincial needs. The federal government has the power to levy both direct and indirect taxes, which includes income taxes.

The Canadian courts case that is most often referred to, the Supreme Court’s decision was not about the government’s right to levy taxes or the constitutionality of it. The case was about labour and taxation, but not whether or not an individual had the right not to pay incomes taxes or file an income tax return. If a Canadian citizen thinks that paying taxes is unconstitutional, they have the right to request the courts to change the law. Laws apply until a court makes that determination.

There are many groups that are promoting the claim that an individual can declare themselves exempt from taxes. There are certain nonprofit organizations that are tax exempt. For them to be legally exempt they must file forms with the CRA and prove that they are tax exempt. Any individual that takes advice and thinks they can declare themselves tax exempt and don’t file tax returns or pay taxes are most likely to cause them to pay penalties, fines, the original taxes, and could be risking prison time for this mistake. Many of these individuals have paid for information from someone who has convinced them that it is true.? Before taken such advice, one must consider the consequences before not paying their taxes.

Myth #2

The government cannot enforce tax laws because they are unconstitutional. This makes the tax system based on a voluntary compliance.

The Facts

The cornerstone of the Canadian Constitution is based on individual compliance with all laws including tax laws. All this means is the government expects citizens to obey the law and pay their taxes and file tax returns.? This does not and that the tax law cannot be charge against a person not paying their taxes. The Income Tax Act or other laws were enacted to make it possible to enforce penalties, fines, the original tax and imprisonment in some cases. There is a program called The Volunteer Disclosure Program allows individuals who have not paid their taxes or filed tax returns to contact the CRA and admit to the facts of their cases. If a taxpayer does this, they will not be doing so without the worry of being penalized or prosecuted.

Myth #3

There are individuals that have said they know people beside themselves who have not paid taxes or filed a return in a long time and the federal government has not enforced the law against them. They think it is that the Income Tax Act is not constitutional and that is why the government can’t enforce the law against them.

The Facts

The CRA is prevented by the Income Tax Act to reveal any information about a taxpayer so they are unable to comment on the individuals that say they haven’t filed an income tax return for years. It is probably that they don’t know of the individuals yet. That could change if they keep bragging about no paying taxes.? In some cases the individual who doesn’t file an income tax return may be missing out on benefits such as the Canada Child Tax Benefit. In this case they could receive more money back by filing a return.

If a Canadian citizen is caught not pay taxes and not filing income tax returns, they could be prosecuted and charged fee of $1000 to $25,000, spend time in prison, and pay the original taxes plus penalties and fines. The CRA does prosecute tax payers who evade paying their taxes. In a period of a year in 2008-2009 they prosecuted 1124 and 323 included fraud and tax evasion. Another thing for anyone not paying tax is that the CRA gets 24,000 calls a year from tax payers reporting people who don’t pay their taxes.