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.

The pay-as-you-go tax system has been adopted by a number of countries including Canada, whereby the taxpayers are required by law to pay their tax as they earn an income. Individuals who do not make their tax payments during the year are obligated to make those payments in full on or before the tax deadline that has been specified by the Canadian Revenue Agency or CRA, as it?s commonly known.

When does a CRA collection action start

In case of non-payment, the CRA has the right to take enforcement action and they do not have to give a warning to the taxpayer or get a court order for doing so. This is to ensure the complete collection of tax for the government.

If individuals are unable to pay off their taxes, the CRA will still collect their taxes either voluntarily or involuntarily, whichever option is necessary. They have specific procedures that they follow for the purpose of collection. Staffers undertake this procedure by first informing the taxpayers about the amount of tax that?s owed by them. They also offer a certain amount of time to taxpayers for setting up a payment plan. If the taxpayers do not take any action, the CRA collection procedure dictates that the assets or funds of the taxpayer will be seized.

CRA collection: payment plan option 

If the taxpayer makes an effort in good faith, the Canadian Revenue Agency will work out a payment plan for them. However, each payment should be made on time or else taxpayers will have to face penalties that can be very severe. If a lump sum is enough to settle the amount, individuals have the option of mailing a check or visit the local CRA office. If a payment plan has been chosen, individuals will be required to pay a specific amount on a monthly basis for satisfying their tax liabilities. Interest will start accruing if the payment is not made on the deadline.

Strict penalties are part of the CRA collection procedure in the scenario where tax is not paid by people in a timely manner and they are unable to pay it. A notice will be sent by the CRA through mail for informing the taxpayer that they intend to collect the tax owed by placing a levy on the individual. The amount owed will also be mentioned on the notice and a short response time is given to individuals before any action is taken. A levy will be placed on any wages or income earned if a response isn?t made to the CRA.

The employer will be contacted by the CRA and a withdrawal of a significant amount will be made from the wage of the taxpayer. The tax deduction will usually be 30% of the paycheck because the CRA is aware that financial survival burden may result otherwise. If the taxes cannot be deducted from the income because there isn?t any, the levy will be placed by the CRA on the home or other assets owned by the individuals. The property and vehicle is possessed and auctioned off in the CRA collection process for clearing the tax dues of the individual.