When tax payers are seeking answers to the problem of tax bills which are outstanding, CRA (Canada Revenue Agency) allows them to make deals detailing a schedule of the tax payment plan. The CRA will always be willing to accept a reasonable monthly installment tax payment plan.
In the absence of a tax payment plan, there is a possibility that the taxpayers will have to be ready to face CRA garnishments on their wages. There are many Canadians who have their wages garnished every year by CRA. These garnishments take place when a tax is owed and there is no submission of a tax payment plan to the CRA. The wage garnishments will also occur if CRA gets your tax situation assessed through a notional assessment and provides evidence that the tax will not be paid within the financial year.
The CRA does not need to get a court order to execute garnishments on your wages unlike other creditors. Salary garnishments are directives to the employer to hand over a certain percentage of the taxpayer?s wages to the CRA. This can be done without the need for informing the taxpayer. The percentage limit is generally about a maximum of fifty per cent of the wages. This could have an impact also on other sources of income such as rental or sub-contractor?s earnings. The additional sources could be garnished in full amounts.
This is not a healthy situation for tax defaulters as apart from causing further financial hardship, it can result in embarrassment in both personal and professional lives. When your employer is served CRA garnishments, it is humiliating and reduces your reliability even in the eyes of your employer.
The Consumer Credit Protection Act has come out with a protection clause for the defaulter where he or she cannot be dismissed from employment on account of the wages being garnished. The employer has a right to terminate employment if the garnishment has been done more than once.
The tax defaulters could take the help of tax consultants to get a reduction in the CRA garnishments and sometimes they may be successful in getting them removed totally. The complete solution lies in coming across with a tax payment plan and not in bits of evasion. It is wiser for the defaulter to get in touch with the tax consultants as they will be able to negotiate with the CRA on your behalf and work out a tax payment plan that may be reasonable and fair and one that is within your financial capabilities.
You may be able to negotiate with the CRA on a personal basis, but a good tax consultant will be able to contribute out of his vast experiences in working out negotiations with the CRA agents. The tax consultants are invariably successful in working out a tax payment plan that includes arrangements of monthly payments of lower value. They may be able to work such arrangements out with lower interest charges and also without any additional penalties.
Call tax consultant team at Tax SOS team right away if you have received notice from CRA about potential legal collection actions at 1-877-982-9767.