I’m not afraid of the Canada Revenue Agency (CRA).
I don’t need to be, and neither do you.
If, however, you hesitate when you receive a brown envelope in the mail from the CRA because of what may be inside that envelope, then you might want to reconsider sending back your direct deposit banking information to the CRA.
How to request direct deposit
As part of a Government of Canada initiative, the CRA provides direct deposit as a standard payment method. Using direct deposit means:
- You will get your money faster.
- You can skip the trip to the bank to deposit your cheque.
- There’s no risk that your payments will be lost or delayed.
- Your payments will always be on time.
- You can start using the money or earning interest right away.
There are several obvious negatives of the CRA having your direct deposit information. As we all know, the CRA is looking for ways to increase efficiencies and they have found over the years that regional intake centres do just that. The objective of these centres is to take immediate action following the expiration of the 90 day Notice of Assessment collection restriction period on personal income taxes – since legal warning is provided in the actual Notice of Assessment. On day 91 these efficient intake centres begin to take actions including calling the taxpayer, sending a legal warning letter or sending a wage garnishment or freezing a bank account. The action taken depends on what information is available on the account.
So if you owe a reasonably small amount of money to the CRA, and give them your bank account information, the chances are good that they can quickly resolve this amount owing by taking it from your account, or if the balance is larger, they can get negotiations started by freezing your bank account.
Not everyone is able to stay on the good side of the Canada Revenue Agency, which is why Intaxicating Tax Services was created, so that I could assist others who are afraid to open that brown envelope or if they have opened it, are unable to act on the CRA’s requests because either they do not understand the request or because the just do not have the capacity to deal with it at this moment. Whatever the reason, there are common and understandable delays which everyone encounters every now and then. During my decade of employment at the Canada Revenue Agency I heard all the stories, I spoke to all the taxpayers I could and I helped in whatever way I could.
Which would you prefer?
Not to be paranoid, giving the CRA your direct deposit information does not necessarily mean they are going to use it against you. If you have a clean record with the CRA and never owe them money then they have no reason to use your banking information to freeze your bank account. If, however, you have had frequent issues with the CRA including long periods of time in collections, then giving them a fresh bank source is probably not the best thing to do at this point in time.
Keeping that banking source to yourself does not guarantee safety from the CRA. If the CRA sends your refund to you via a cheque, and you deposit or cash that cheque, the CRA has the power to trace that payment and can get your banking information that way. The best way to stay out of trouble with the CRA is to stay current, or if you are behind and own money to the CRA, then get the help you need to get current and stay current.
So please, do not be afraid of the CRA any longer. You have us now, Intaxicating Tax Services, to give you the Common Sense approach to taxation and the CRA. We’re not going to mislead you, engage in fear-mongering or present the scariest scenario possible in order to scare you. We’re going to tell you the truth and together let our common sense lead us to the best solution possible for you.
Please visit us at http://www.intaxicating.ca
Or email us at info@intaxicating.ca
Your first consultation is free.
The only bad choice is no choice!
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You know that by law, the only way the CRA can remove money from your account is by you signing a pre authorized debit form, or via court order?
They can’t just take money from you because you have direct deposit.
Don’t write things that aren’t true. Direct deposit is for everyone. It makes way more sense.
Source: FPE Level 1, Bach. Business Administration (Fnce)
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Yes they can. CRA can freeze your bank account and the bank has to send your money to them. The court order is a formality.
DioGuardi Tax Lawyers explains very well this and lot of other stuff.
Regards
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That’s different. That requires a judgement or a garnishee summons to made against you. They cannot by Canadian law, use a direct deposit authorization as a preauthorized debit agreement.
Again, writing things that aren’t true makes things more confusing for taxpayers that are seeking actual advice. A court order is not a formality, by the way. The Tax Court judge will issue the order, and the CRA cannot do anything until they receive that order.
Source: FPE Level 1, Bach. Business Administration (Fnce)
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You use a word(?) “garnishment”. Is that like something you put on a pizza (to garnish)? Or do you mean garnishee?
For someone who wants to HELP you could learn the difference so YOU don’t end up confusing people yourself.
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