CRA Tax Collection Steps And Procedure
Posted by support2 March 03 2014
Tagged Under : cra, tax collection, Tax Consultant Toronto, Tax problems
CRA is the central authority in Canada responsible for the collection of taxes from eligible individuals and entities. Although every taxpayer is required to file and pay his tax by a specified date however in negligence of this duty, the CRA takes it upon itself and takes actions towards CRA tax collection.
The first step taken by CRA tax collection is initial assessment of the owed taxes for a taxpayer and asks the taxpayer to pay the specific amount. If the tax amount is not paid within a month?s time or within 30 days the taxpayer will be called by the CRA agent and asked for the outstanding tax amount to be paid. Again time will be given to the taxpayer to pay his or her tax owing in full or at last reach an arrangement with the CRA regarding tax payment; however in wake of failure of doing so a final notice is issued by CRA to the taxpayer before it initiates any CRA tax collection method.
The CRA will finally assign a 90 day period to the taxpayer to pay the amount or face legal collection actions against him or her. These legal actions can include
– Income Garnishments ? this will allow CRA to take over a set amount from the taxpayer?s income to retrieve the tax amount. Remember the CRA does not need a court order to garnish the wages or income of a taxpayer who owes taxes to CRA. CRA will only notify the taxpayer?s employer and start garnishing the taxpayer?s account. This is often the initial CRA tax collection method applied on a tax defaulter.
– Seizure of bank account ? Your bank account will be seized until the entire amount of the tax is paid.
– Property or home tax liens ? Tax liens are basically claims made by CRA on the property or home of the taxpayer. The CRA can implement a tax lien over any individual who owes CRA any tax owing as a form of CRA tax collection.
Tax liens once placed will rob you off the property rights and all rights will be placed in the hand of CRA until an agreement is decided upon CRA and the taxpayer. The CRA advises and informs any individual about the tax lien once it is registered.
Tax lien method of CRA tax collection does not exactly rob off the title of the property from the taxpayer rather it only prevents the taxpayer from refinancing or selling the property until the due taxes are paid in full. Although CRA lien over a taxpayer?s home is a very serious CRA tax collection method however it takes months even years of prior notice to pay before it actually happens.
Anyone who finds themselves stuck in such a situation can immediately contact Tax SOS for instant help and solution of the problem. Tax SOS can help you in devising a payment plan in wake of warding off the specific CRA tax collection method and complete all required documentation and requirement to avoid any legal action to be taken. Also Tax SOS can help individuals in case a tax lien has been placed on the property of any taxpayer and design a perfect possible solution to this problem.
CRA being a tax collection authority has rights to collect all due taxes and if not paid by the taxpayer even after repeated notices and attempts of recovery by CRA, it has the right to impose CRA tax collection methods on the taxpayer which can range between garnishments to property liens and even legal prosecution. Acquiring tax experts help in such a case is the best way to escape CRA tax collection methods.