CRA Collections - How to deal with your Tax Debt




CRA Collections - How to deal with your Tax Debt

Taxpayers are often overwhelmed by a tax assessment or a Tax Statement of Account that shows a balance owing that is impossible to pay.  One common reaction is to ignore it since you can’t afford to pay.


If I ignore CRA will they go away?


A CRA tax debt has to be addressed immediately. If CRA has assessed you for income taxes or GST owing and you have not made acceptable (to CRA) payment arrangements, a CRA collections officer will commence enforcement action.

What can CRA do to enforce payment of my tax liability?

Enforcement action will usually consist of seizing your bank account, garnishing (seizing) your wages or accounts receivable and sometimes registering a lien on your home. CRA can also take action to seize your personal property to sell and repay your tax debt.

How do I deal with a CRA collections agent?

Dealing with the CRA officer yourself is usually a mistake.  Collection officers are very aggressive and will come to your home or office with one purpose – collect as much as possible as quickly as possible.  They have many collection powers, but may mislead taxpayers as to what their rights are.

How can I resolve my matter with CRA collections?

You need to retain a professional as soon as CRA notifies you of a tax debt. We can help.  We have extensive experience in dealing with CRA collections and have been solving tax debt problems since 1987. We may be able to challenge your tax assessment by filing a Notice of Objection.  If not, we can often negotiate a payment arrangement that is acceptable to you as well as to the tax department collections agent. If these negotiations are done at an early stage, we can usually avoid enforcement actions such as bank account seizure or wage garnishments. If your bank account has already been seized or your wages garnished, once a satisfactory payment schedule is agreed to, CRA will lift the garnishment and release your bank account.

The penalties and interest on my tax liability are through the roof - is there anything I can do?

We may be able to reduce penalties and interest on your full tax debt by filing a Taxpayer Relief (Fairness) Application. 

What will happen if I am never able to pay off my tax liability?

If the amount is too large to ever pay off we will direct you to a bankruptcy trustee who will either make a consumer proposal or submit a bankruptcy application to fully eliminate the taxes owing.  

Do I Have to meet with a Collections Officer who comes to my home or office?

No. If a collections officer comes to your home or office, you should seek legal assistance immediately. You do not have to let the officer into your home or office.

Can a Collections Officer forgive part of my debt if I make a payment?

Collections officers do not have discretion to forgive any amounts of your tax debt. Their job is to collect your tax debt in its entirety. Contact us for help with your tax debt.

"This article provides information of a general nature only. It may no longer be current. It does not provide legal advice nor should it be relied upon. If you have specific legal questions you should consult a lawyer."


David J.Rotfleisch, C.A, J.D
Tax & Business Lawyer