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.