It is not uncommon for businesses to face tax problems and the main reason is the structure of the taxation system that mostly supports tax problems Canada, like any other country alike. Starting from the initial point of filing tax returns to the arrival of the tax collection officer, tax problems Canada can be defined as nothing else but stressful.

Also the quantity of people that today face tax owing that are larger than they can pay is also growing extremely and it has become a common occurrence in the count of common tax problems Canada. A lot of people face legal actions or at least fear for them and almost every day CRA threatens loads of people of taking actions against them. Although there is nothing like too late for anything and even in extreme cases something can surely be worked out between taxpayers that owe amount and CRA, however what is required is the service of an expert, knowledgeable and trustworthy tax professional.

One thing that goes without a doubt is that dealing with CRA collection officers and that too aggressive ones are not an easy task. Many people may think that solving their tax problems Canada through devising a tax payment plan that is according to their affordability will not be a very hard task and that might have been true too not very long ago, however today, the aggressiveness of the taxman along with the tax laws have made the scenario quite different.

The attitude of the tax department and the collection officers nowadays has been directed towards collecting their owed amount as soon as possible rather immediately if possible. Previously the CRA would agree to a six month long payment plan or even a year-long but today a lot of negotiating is required and that is why hiring professional tax consultants has become a prerequisite when dealing with tax problems Canada.

Professional tax consultants have many ways of assuring that CRA will attend to a payment plan that you can afford and through these ways they can deal with different cases successfully with the CRA easing the taxpayers and CRA simultaneously. The very first thing that is required to deal with the CRA is knowledge of tax system and what is allowed under what condition as without this knowledge, things can even turn against you and only increase your tax problems Canada.

Tax is undoubtedly one of the most difficult areas to consult within any business and while companies do have accountants who also keep track of all due taxes, however whenever it comes to dealing with the CRA, it always pays to hire a tax professional, who is not only aware of the rules prevailing currently regarding tax system, but also one that is in regular contact with CRA officials   Professional tax consultants are one essential ingredient that can improve the taste of your tax problems Canada into a sweet experience at the end.

Summary

Hiring a tax consultant is vital to solving of a majority of tax problems Canada which cannot in anyway be solved on personal basis, as dealing with CRA is becoming more and more of a challenge through every passing day.

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.

Summary

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.

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.