Insolvent or in Tax Trouble? Don’t Let the CRA Decide. You Decide!

Are you Insolvent or do you just have Tax Troubles?

Don’t let the CRA decide this for you… They want you to do what is easiest for them!  You need to do what is best for you!

In my experiences which included almost 11-years working in the Canada Revenue Agency (CRA), you should never allow the CRA to decide whether you can fix your tax problems or whether you should go bankrupt.

From the stand-point of a CRA Collections officer, going bankrupt is great because it removes the account from their inventory of accounts to collect / resolve.

Your file disappears from their inventory and re-appears in the CRA’s Insolvency Unit inventory.

From the perspective of the Collections Department, it’s case closed!

 

There are 3 ways a CRA Collections Office resolves one of their accounts;

1) Collect it / fix the compliance issue(s)

2) Write it off because they cannot collect it

3) Move the account to the Insolvency unit

 

Go Bankrupt!

The CRA’s Collections Officers are not allowed to tell you to go bankrupt. In fact, they are taught in their training that they are not allowed to do that, and that sentiment is reinforced at all future training they attend.  As someone who trained CRA Collections staff for 5-years, I can confirm this fact.

Collections staff are not allowed to even suggest that you go bankrupt.  They might confirm it, but that’s all they can do.

What CRA Collections can do, however, when they feel you are insolvent, is to force you into bankruptcy via their collection actions, which include but are not limited to;

  1. Bank garnishment
  2. Wage garnishment
  3. Lien on a property
  4. Enhanced garnishment to accounts receivables (in the case of a business)

All the while, why applying these garnishments, the CRA refuses to release the hold on the accounts.

They freeze every source of income that you might have and you are faced with the decision to come up with the funds to pay them, or file for a proposal or an assignment in bankruptcy.

In some cases, a bankruptcy is unavoidable and the right solution, but not in every case, which is why I strongly recommend speaking to someone who is looking after your interests first and foremost.

There are tax-related companies who are fronts for insolvency firms, so they might appear  to want to help you, but they want you to file for bankruptcy, and there are other tax-service firms which gather your information and they unable or unwilling to help you, pass you along to a trustee.

You don’t want or need either of those.

You need a tax firm which has the experience in CRA’s collections, and who have the relationships with not only Insolvency firms, but mortgage brokers, reputable accountants and investment professionals so that you’re options are laid out for you to decide the best option.

Not the CRA.

In order to resolve your tax issues you need to disclose the details so your options can be determined, and you need your tax help to do the same.

Ask your tax-help the following questions;

  1. Are you committed to finding me a tax-solution first.
  2. If that solution is not going to be accepted by the CRA, what other options do you feel would work.

Don’t be weary if a firm wants to charge you a small fee to diagnose and plan out your solution.

You should be weary if they want to charge you a significant amount of money to diagnose it  and not give you a plan.  If they want to keep the plan a secret, and not educate you along the way, it’s because there is no plan.

Likely their solution it to drag you along the process knowing that the CRA will come along and lower the boom and then suggest to you that your only option is to conveniently have them file bankruptcy for you.

Don’t ask the CRA if you should go bankrupt.  You might not like the answer.

If you owe money to the CRA and you’re not sure if the debt is a tax matter which can be resolved, or if bankruptcy or a proposal are better options, just ask!  Send an email to info@intaxicating.ca and let’s talk!  We’re here for you.

inTAXicating

Insolvent or Tax Troubles?  Don’t Let the CRA Decide!

In my experiences which includes almost 11-years working in the Canada Revenue Agency (CRA), you should never allow the CRA to decide whether you can fix your tax problems or whether you should go bankrupt.

From the stand-point of a CRA Collections officer, going bankrupt is great because it removes the account from their inventory of accounts to collect / resolve.

Your file disappears from their inventory and re-appears in the CRA’s Insolvency Unit inventory.

From the perspective of the Collections Department, it’s case closed!

There are 3 ways a CRA Collections Office resolves one of their accounts;

1) Collect it / fix the compliance issue(s)

2) Write it off because they cannot collect it

3) Move the account to the Insolvency unit

Go Bankrupt!

The CRA’s Collections Officers are not allowed to tell you to go bankrupt. In fact, they…

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Insolvent or in Tax Trouble? Don’t Let the CRA Decide.

Insolvent or Tax Troubles?  Don’t Let the CRA Decide!

In my experiences which includes almost 11-years working in the Canada Revenue Agency (CRA), you should never allow the CRA to decide whether you can fix your tax problems or whether you should go bankrupt.

From the stand-point of a CRA Collections officer, going bankrupt is great because it removes the account from their inventory of accounts to collect / resolve.

Your file disappears from their inventory and re-appears in the CRA’s Insolvency Unit inventory.

From the perspective of the Collections Department, it’s case closed!

 

There are 3 ways a CRA Collections Office resolves one of their accounts;

1) Collect it / fix the compliance issue(s)

2) Write it off because they cannot collect it

3) Move the account to the Insolvency unit

 

Go Bankrupt!

The CRA’s Collections Officers are not allowed to tell you to go bankrupt. In fact, they are taught in their training that they are not allowed to do that, and that sentiment is reinforced at all future training they attend.  As someone who trained CRA Collections staff for 5-years, I can confirm this fact.

Collections staff are not allowed to even suggest that you go bankrupt.  They might confirm it, but that’s all they can do.

What CRA Collections can do, however, when they feel you are insolvent, is to force you into bankruptcy via their collection actions, which include but are not limited to;

  1. Bank garnishment
  2. Wage garnishment
  3. Lien on a property
  4. Enhanced garnishment to accounts receivables (in the case of a business)

All the while, why applying these garnishments, the CRA refuses to release the hold on the accounts.

They freeze every source of income that you might have and you are faced with the decision to come up with the funds to pay them, or file for a proposal or an assignment in bankruptcy.

In some cases, a bankruptcy is unavoidable and the right solution, but not in every case, which is why I strongly recommend speaking to someone who is looking after your interests first and foremost.

There are tax-related companies who are fronts for insolvency firms, so they might appear  to want to help you, but they want you to file for bankruptcy, and there are other tax-service firms which gather your information and they unable or unwilling to help you, pass you along to a trustee.

You don’t want or need either of those.

You need a tax firm which has the experience in CRA’s collections, and who have the relationships with not only Insolvency firms, but mortgage brokers, reputable accountants and investment professionals so that you’re options are laid out for you to decide the best option.

Not the CRA.

In order to resolve your tax issues you need to disclose the details so your options can be determined, and you need your tax help to do the same.

Ask your tax-help the following questions;

  1. Are you committed to finding me a tax-solution first.
  2. If that solution is not going to be accepted by the CRA, what other options do you feel would work.

Don’t be weary if a firm wants to charge you a small fee to diagnose and plan out your solution.

You should be weary if they want to charge you a significant amount of money to diagnose it  and not give you a plan.  If they want to keep the plan a secret, and not educate you along the way, it’s because there is no plan.

Likely their solution it to drag you along the process knowing that the CRA will come along and lower the boom and then suggest to you that your only option is to conveniently have them file bankruptcy for you.

Don’t ask the CRA if you should go bankrupt.  You might not like the answer.

If you owe money to the CRA and you’re not sure if the debt is a tax matter which can be resolved, or if bankruptcy or a proposal are better options, just ask!  Send an email to info@intaxicating.ca and let’s talk!  We’re here for you.

Voluntary Disclosure Program Screening

I received an interesting call late Friday afternoon from a Canadian taxpayer who wanted to know more about the Canada Revenue Agency’s Voluntary Disclosure Program.

She said that she thought she was being “swindled”.

She called a “tax solution” type business and they said that for $3,000.00, they would “investigate” as to whether or not she qualified for the program.

To which I asked her this question;

“Has the CRA tried to get you to file outstanding returns, either by phone or by sending letters to you?”

“Yes”, she replied.

“Then you do NOT qualify for the program” was my response.

And I saved her $3000.00.

If the CRA has already reach out to you – or attempted to reach out to you – regarding unfiled returns or unreported income, then your disclosure is no longer voluntary.

For more information, read up on the CRA’s Voluntary Disclosure Program, through the CRA’s website, here.    Or Google “CRA VDP” and refer to the websites beginning with http://www.cra.gc.ca, or http://www.CRA-arc.gc.ca/voluntarydisclosures

 

Changes to the CRA’s RC59 Business Consent Form (For Online Access) Coming in May 2017

The Canada Revenue Agency (CRA) has announced on their website that there are changes coming to the RC59 Business Consent form.  This form is completed by a taxpayer who has business accounts or by businesses who wish to have a representative contact the CRA on their behalf.

Without having this form signed and dated, the CRA will not speak to the representative.

These changes are expected to be law in May of 2017.

These laws apply to representatives who use the RC59, Business Consent, to get online access to their business clients’ information in Represent a Client.

  1. After May 15, to request online access to tax information for a business, you will need to complete the authorization request in Represent a Client. Form RC59 will no longer be used to authorize online access.

    To complete an authorization request:

    1. Log into Represent a Client.
    2. From the Welcome page, select “Review and update.”
    3. Select “Authorization request” at the bottom of the “Manage clients” tab and follow the instructions.
    4. Print the signature page for your client to sign.

    Scan and send the signed copy of the signature page to the CRA using Submit documents.

  2. When you use Represent a Client, you’ll have access to your business clients’ information in five days or less instead of the 15 days it takes today with form RC59.
    You can also see which business clients have authorized you and if the authorizations expire by selecting “Businesses that have authorized this business (or RepID)” under the “Manage clients” tab.
  3. What if I don’t use Represent a Client?
    If you still prefer your current process, you can still use form RC59 to request access to your business clients’ information by telephone or mail.

 

Auditor General Report Points Out The Obvious: CRA takes too long to resolve tax objections.

In some not-news of the day, the Federal Auditor General has found that the federal government takes months — sometimes years — to make decisions, costing Canadians time and money when it comes to resolving tax disputes.

Audits of the Canada Revenue Agency unveiled exceedingly long delays which fall short of public expectations in an era of advanced technology and instant communications.  He noted that departments, like the CRA, assess the time it takes to make decisions against their own internal benchmarks, giving little heed to what the taxpayers they serve might consider a timely decision.

The Canada Revenue Agency often leaves taxpayers waiting for months after they file formal objections to their tax assessments.  Appeals officers seeking help from other parts of the agency often wait a year or more.

Over the last 10 fiscal years, the inventory of outstanding cases at the CRA grew by 171%, while the number of employees dedicated to resolving them grew by only 14%, the audit found. The backlog of unresolved cases as of March 31 represented more than $18 billion in federal taxes, the audit said.

But the solution here is not necessarily to grow the public service, but rather a review of the internal policies and how the union impacts the employees ability to do their jobs might need to be reviewed and revamped.

I remember when I started working in the CRA and was “advised” that I should be working 7 accounts per day.  I can tell you this, when you begin your day at 7:15, and are completed your work by 8:30 there is only so much coffee you can drink per day.  I wound up holding several inventories of accounts, and assisting my teammates in order to keep busy.

Eventually, as rules loosened, I was in charger of a collections / compliance team and we were working upwards of 90 accounts per day each which made such a significant dent in the total amounts coming into collections that they disbanded the team.

Our office had to take on work from other tax offices in order to have enough work for each employee and as stay left, took on other positions outside of collections or took leaves they were not replaced.  Our tax office at 50% less staff was resolving 400% more accounts…

But like everything else in life, there was a downturn, contracts up for renegotiation, people moved on (like myself) and now the Auditor General reports there are too many accounts which cannot be handled at current staffing levels.

Ahhh, government.

How do I correct or dispute inaccuracies on my credit file?


I get lots of questions related to Credit Bureaus and items which show up well after they have been paid or which do not belong on there at all.

Having worked for Equifax many, many years ago right after I started working for the CRA and they release all the temporary staff for an 11-month period due to budget cuts, I can proudly say that Equifax makes it very easy to communicate with them regarding any such issues.

It’s all laid out on their website, but I provided a summary here:

Complete and submit a Consumer Credit Report Update Form to Equifax.

It is necessary to specify what information is incorrect or what information does not belong to you.

Equifax will verify that information afterwards as part of their investigation.

You will need to include photocopies of all necessary documents and identification to update your personal Credit Report (Ex: receipts, legal documents, 2 photocopies of pieces of valid identification, including proof of current address)

Fax the request to them at:

Fax: (514) 355-8502

Your request will be processed within 10 to 15 business days. After this period has elapsed, a confirmation letter will be sent to your mailing address.

OR

By Mail:

Equifax Canada Co.
Consumer Relations Department
P.O. Box 190, Station Jean-Talon,
Montreal, Quebec H1S 2Z2

Your request will be processed within 15 to 20 business days . After this period has elapsed, a confirmation letter will be sent to your mailing address.

Equifax will verify the necessary information and mail you a confirmation.

 

Could it be any easier than that?!?

 

What is an IRS Form, W8BEN?

What is a W8BEN?

The W8BEN, or Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals) is a form which, when completed, is provided to the US income provider (Not the IRS!) in order to prevent 30% of your earnings being withheld and remitted to the IRS.

The W8BEN claims the treaty rate between Canada and the US which means you cannot be taxed by both countries on the same income, and by completing this form, you are certifying the following information to the IRS;

  • I am the individual that is the beneficial owner (or am authorized to sign for the individual that is the beneficial owner) of all the income to which this form relates or am using this form to document myself as an individual that is an owner or account holder of a foreign financial institution,
  • The person named on line 1 of this form is not a U.S. person
  • The income to which this form relates is:
    • (a) not effectively connected with the conduct of a trade or business in the United States,
    • (b) effectively connected but is not subject to tax under an applicable income tax treaty, or
    • (c) the partner’s share of a partnership’s effectively connected income,
  • The person named on line 1 of this form is a resident of the treaty country (in this case, Canada) listed on line 9 of the form (if any) within the meaning of the income tax treaty between the United States and that country, and
  • For broker transactions or barter exchanges, the beneficial owner is an exempt foreign person as defined in the instructions. Furthermore, I authorize this form to be provided to any withholding agent that has control, receipt, or custody of the income of which I am the beneficial owner or any withholding agent that can disburse or make payments of the income of which I am the beneficial owner.
  • I agree that I will submit a new form within 30 days if any certification made on this form becomes incorrect (changes).

In a nutshell, you’re telling the IRS, you are NOT a US person, that you do not work in the US and that you will report your income to the CRA.

Otherwise, they keep 30% of it.