Canada Revenue Agency (CRA) Lien Questions Answered

There are many questions around writs and liens – each situation can be very different – but there are some commonly asked questions which pop-up when someone realizes that the Canada Revenue Agency (CRA) has registered a lien against their property.

Commonly asked questions:

1. When does a lien have to be dealt with. A:When the property needs to be sold or refinanced. Unfortunately, many Canadians realize that the CRA has actually registered a lien when the property owner is attempting to sell or refinance their property, which is also the worst time to attempt to get the CRA to work with you.

2. Can I negotiate with the CRA? A: No, the CRA will not / does not negotiate tax debts. You can negotiate a payment arrangement under certain circumstances, and you can “negotiate” penalties and interest by applying to the CRA’s Taxpayer Relief program, but no other negotiations exist outside of bankruptcy.

3. Will the CRA remove a lien if I file for bankruptcy? A: No, liens survive bankruptcy.

4. Once I pay the lien amount, my debts to the CRA are done, finished, over? A: No, actually, the lien amount represents an amount owing in your account at the time the lien was registered. There is still interest accumulating on the debt (possibly other assessments too). Once the lien is resolved, there is the additional amount(s) which must be cleared up.

5. How can I get a lien removed? A: Great question! You can, provided you are doing so for a reason. If you need the lien removed in order to refinance because that re-financing will result in the CRA getting paid, then you might be able to have the CRA temporarily lift the lien to allow for that transaction to proceed.

6. Can I transfer the property out of my name / remove myself from title? A: NO, NO, NO!!! This is very dangerous because if you transfer an asset from your name into another person’s name when you have a debt to the CRA, or may have a debt to the CRA, and that transfer is for less than the fair market value, then the person who received that asset can be held liable for your tax debts.

7. Is the CRA going to act on the lien and kick me out of my house? A: No. If there was a lien on a secondary property such as a cottage for example, then the CRA might be prompted to take action and force a sale, but for a principal residence, no they are not.

8. If I leave it long enough, will it go away? A: Unfortunately no, unless you knew something about the way the CRA operates and there were specific criteria which applied to you and your financial situation.

Email Example

To help clear up some of the confusion around this topic, here is an email we received recently regarding a CRA lien. This email contains some common questions, along with some common misinformation.

Hopefully this example will help Taxpayers who have liens registered against them by the CRA.

Lien email.

Question: “When the CRA puts a lien on a property, we are advised to contact a lawyer. Why is that? Can we not get written confirmation from the CRA ourselves, that after the lien amount is paid, the lien will be removed within a set period of time?  If they agree to do it, do they just delay anyway or check whether they want anything else from you first?  Is this all true?”

Answer: There is a lot here, but let’s break it down into manageable pieces.

When the CRA registers a lien against a property – which is a regular CRA collections technique in order for the CRA to secure their debt – they know what the outcome will be.  As a result, while it might be a huge inconvenience, it’s usually not a concern unless the property is going to be sold, or if it needs to be re-financed.  In that case, the lien needs to be addressed.  Otherwise, the amount the CRA registers the lien for is the amount owing on the day the lien was registered and interest and possibly debt continues to accrue on the account.

The CRA cannot and will not provide confirmation that once a lien is paid that the lien will be removed because there might be additional debts which the CRA is going to need to register a lien for.  They prefer not to put things in writing which could come back to cause them problems collecting tax debts.

If, however, there is a just a tax debt, and the collector registers a lien and that lien is satisfied (paid) – that means the balance was paid in full through re-financing or selling the property.

The major problem that occurs here is that once a tax account is paid, that account is automatically removed from the inventory of accounts that the collector has – often without them knowing. This means they do not have the opportunity to remove the lien from the property and need to be reminded there is a lien in place so they can finish it up, remove the lien and close the account.

Otherwise, it can be very difficult to get a lien removed after the fact because there is no one assigned to it, and no one wants to take responsibility for working an account which is not assigned to them.

So if there is a lien registered and you pay it, make sure to follow up in a timely manner to ensure it’s been taken off.

Lien / Writ / Certificate Help

If you, or someone you know has a lien registered on a property that they own and are looking for suggestions, recommendations or solutions to resolve this, then look no further than inTAXicating Tax Services.

We can be reached via email at info@intaxicating.ca, to get the ball rolling.

Our services will cost you much less than you expected, and your results will be far greater than you could have imagined.

Canadians Must Hold Governments Accountable For Their Spending of Tax Revenue

The average Canadian family’s largest expense is taxes.

Therefore it should not be unreasonable that Canadians expect all levels of government to not waste their tax dollars, money taken off their paychecks and paid into the system.

Whether tax dollars are wasted when a government pays a negotiation bonus to unions, or if they have to pay private companies a fine after breaking contracts with them, governments must do a better job at keeping the optics above-board and avoid $200,000 moving expenses or $1300 a person dinners altogether!

But they don’t, or they can’t, and we, as Canadians have come to expect that from our elected officials.

If governments want to spend fast and loose with money, let it be their own, or at the very least taxes off of non-Canadians – like withholding taxes, or something of the like.

But if we, as Canadians do not hold these governments accountable for their spending of our taxes, we allow them to continue to do this and they will continue to do so.

If we held our elected officials to a higher standard and used the opportunity to remove governments who wasted taxpayer dollars immediately, it would send a message to the next government that they have to spend wisely.

This information came out in the late summer months from the Fraser Institute, an economic think-tank.

To clarify, when referring to taxes, its not just income taxes, but all the taxes Canadian Taxpayers make to all levels of governments (federal, provincial, and local), including both visible and hidden taxes— everything from income taxes, which are less than a third of the total, to payroll taxes, sales taxes, property taxes, health taxes, fuel taxes, vehicle taxes, import taxes, alcohol taxes, and much more.

In a recent report published by the Fraser Institute, they tracked the total tax bill of the average Canadian family from 1961 to 2014.

For 2014, they estimated that the average Canadian family (including unattached Canadians) earned $79,010 in income and paid $33,272 in total taxes—or 42.1% of income—while just 36.6% went to food, clothing, and shelter combined.

Indeed, Canadian families spend more on taxes than the basic necessities of life.

But it wasn’t always this way.

Back in 1961, the first year the Fraser Institute started tracking this data, the average Canadian family paid a much smaller portion of its household income in taxes (33.5%) while spending proportionately more on the basic necessities (56.5%).

Since 1961, Canadians’ total tax bills have increased by 1,886%, dwarfing increases in shelter costs (1,366%), clothing (819%), and food (561%). Even after accounting for inflation (the change in overall prices), the tax bill shot up 149.2% over the period.

And now taxes eat up more income than any other single family expense.

So why should Canadians care, aside from the fact that we work really hard to earn an income, and pay these taxes?

With more money going to the government, families have less to spend on things of their own choosing, whether it’s a new car, technological gadget, or family vacation. They also have less money available to save for retirement and their children’s education, or to pay down household debt.

While there’s no doubt that taxes help fund important government services, the issue is the amount of taxes that governments use compared to what we get in return.

To make an informed assessment, you must have a complete understanding of all the taxes you pay. Unfortunately, it’s not so straightforward because the different levels of government levy such a wide range of taxes—with many taxes buried in consumer prices and hard to discern.

Armed with this knowledge, we can hold our governments more accountable for the resources they extract and continue a public debate about the overall tax burden, the amount and scope of government spending, and whether we’re getting our money’s worth.

Otherwise, taxes will continue to increase.

So why is this important to us?

It is important because we understand that taxation is a necessity in order to have a healthy, wealthy, productive society for everyone, and in paying taxes there are circumstances which arise that make the system disadvantages to some Canadians.

Unlike our neighbours to the south who shoot elected officials for spending money, we are much more in control of our emotions (plus, no guns, eh?) so we need to hold them accountable in different ways, such as, not re-electing them. and going to public debates, and letting the officials that we elect know that they can no longer waste our money!

We can fix this.

The Truth and Myths Around the CRA’s Taxpayer Relief Program

There is quite a lot of information on the Internet around the Canada Revenue Agency’s (CRA) Taxpayer Relief Program (formerly known as fairness).  Understandably, there is also a lot of misinformation around this program.  After having spent almost 11 years working in the CRA – beginning as an entry-level collector and working my way up through the division to a team leader before taking my MBA and heading into the private sector –  I have learned quite a lot about how the Taxpayer Relief program actually works.

This post will identify the key objectives of the program straight from the CRA, and then highlights some common myths about the program and the actual fact about why it makes sense to invest considerable time and effort into an application, or engage the services of someone who knows the program inside and out.

The Taxpayer Relief program was set up to allow for the Minister of National Revenue to grant relief from penalty and/or interest when the following types of situations prevent a taxpayer (individual or corporation) from meeting their tax obligations:

• Extraordinary circumstances;
• Actions of the Canada Revenue Agency (CRA);
• Inability to pay or financial hardship;
• Other circumstances

The program distinguishes between “cancelling” and “waiving” of penalties and/or interest as the CRA understands that granting relief to a taxpayer only to see them smothering in penalties and interest again is an exercise in futility.

The term “cancel” refers to a penalty or interest amount that is assessed or charged for which relief is granted, in whole or in part, by the CRA.

The term “waive” refers to a penalty or interest amount that is not yet assessed or charged for which relief is granted, in whole or in part, by the CRA.

The term “Taxpayer” includes individual, employer or payer, corporation, partnership, organization, trust, estate, goods and services tax/harmonized sales tax (GST/HST) registrant or claimant.

Now, you or your client, has been charged penalties and / or interest and you want to know if you qualify.  Look no further than the CRA website, and their section on Taxpayer Relief, here.

Circumstances that may warrant relief include;

Extraordinary circumstances

Penalties or interest may be cancelled or waived in whole or in part when they result from circumstances beyond a taxpayer’s control.  Extraordinary circumstances that may have prevented a taxpayer from making a payment when due, filing a return on time, or otherwise complying with a tax obligation include, but are not limited to, the following examples:

• Natural or human-made disasters, such as a flood or fire;
• Civil disturbances or disruptions in services, such as a postal strike;
• Serious illness or accident; and
• Serious emotional or mental distress, such as death in the immediate family.

Actions of the CRA

The CRA may also cancel or waive penalties or interest when they result primarily from CRA actions, including:

• Processing delays that result in taxpayers not being informed, within a reasonable time, that an amount was owing;
• Errors in CRA material which led a taxpayer to file a return or make a payment based on incorrect information;
• Incorrect information provided to a taxpayer by the CRA (usually in writing);
• Errors in processing;
• Delays in providing information, resulting in taxpayers not being able to meet their tax obligations in a timely manner; and
• Undue delays in resolving an objection or an appeal, or in completing an audit.

Inability to pay or financial hardship

The CRA may, in circumstances where there is a confirmed inability to pay amounts owing, consider waiving or cancelling interest in whole or in part to enable taxpayers to pay their account. For example, this could occur when:

• A collection has been suspended because of an inability to pay caused by the loss of employment and the taxpayer is experiencing financial hardship;
• A taxpayer is unable to conclude a payment arrangement because the interest charges represent a significant portion of the payments; or
• Payment of the accumulated interest would cause a prolonged inability to provide basic necessities (financial hardship) such as food, medical help, transportation, or shelter; consideration may be given to cancelling all or part of the total accumulated interest.

Consideration would not generally be given to cancelling a penalty based on an inability to pay or financial hardship unless an extraordinary circumstance prevented compliance, or an exceptional situation existed. For example, when a business is experiencing extreme financial difficulty and enforcement of such penalties would jeopardize the continuity of its operations, the jobs of the employees, and the welfare of the community as a whole, consideration may be given to providing relief of the penalties.

Other circumstances

The CRA may also grant relief if a taxpayer’s circumstances do not fall within the situations described above.

The CRA expects these guidelines to be used when applying for relief and that the requests are made within the deadlines for requesting relief, which is limited to any period that ended within 10 years before the calendar year in which a request is submitted or an income tax return is filed.   The 10-year limitation period rolls forward every January 1st.

If filed using the correct form, with sufficient supporting documentation, a response from the Taxpayer Relief Program can take anywhere from 3 months to 2 years due to the amount of requests.  In order to ensure that you are making the best claim possible, you really should engage the services of a professional, as they would be able to assess whether or not your request is sufficient, and they would ensure that you meet all the other conditions which must be in place for the CRA to review and consider your application.

At the end of the day, if you have a reasonable chance of being successful under this program, the investment made to have it written, reviewed or monitored by an expert is a worthwhile expenditure.

Now let’s have a look at some common myths around this program which are floating around the Internet.

Myths

Myth: That the CRA’s Taxpayer Relief program is a one time program and that you had better take your best shot the time you decide to apply.

Reality: Not true,  This program is available to all Canadians who have been charged penalties and / or interest and as such, they have the right to ask for relief each and every time it is warranted.  The Taxpayer Relief Group do not maintain collection inventories and as such they review each case on the merit of its submission without any influence from the permanent collections diary or the collector assigned to the case.

Myth: That the CRA’s Taxpayer Relief Program is used in order for the CRA and a taxpayer to negotiate a deal which would resolve the taxpayer’s debt issue by settling the debt and accepting less than the actual amount owed to them.

Reality: Never, ever, ever!  The CRA does NOT settle debts outside of bankruptcy or a proposal, and they certainly do not use the taxpayer relief program for this purpose.  As a matter of fact, I can speak of a first hand experience where a collector used the word “settle” in the permanent collection diary of a corporation which had paid a principle tax debt of $650,000, because they wanted to fight the $775,000 in penalties and interest through Taxpayer Relief.  The CRA sent back the $650,000 and re-opened negotiation with the corporation because they did not want to set the precedent of settling tax debts through the Taxpayer Relief Program.

Myth: I cannot afford to pay my taxes, so I am not going to file my tax return, and then when I have a debt, I can ask for relief because I had no money?

Reality:  Failure to file a tax return is a criminal offence which can result in prosecution, so you should always file, and be clear to the CRA upfront that money is tight.  But before an application is made to the Taxpayer Relief Program, all outstanding returns must be filed up to date, and all installments must be accounted for.  Otherwise, the application is set aside until everything is current.

Myth: Having a disability or illness from birth qualifies me for Taxpayer Relief.

Reality: Probably not.  If you have managed to conduct your affairs for a period of time without any tax issues, but then something happens which cases the accumulation of penalties and interest, you cannot use your disability or illness when applying for relief, unless something happened during the period in which the penalties and / or interest were applied as a result of a worsening of your disability / illness.  In that case, you would need to substantiate this with supporting letters from your doctors and specialists.  

Myth:  I met with someone who is going to write a letter to the CRA asking for relief and they have sent me the letter to review.  If I sign it, and they send it off, am I now being considered for relief?

Reality:  Not any more.   Years ago, taxpayers were able to send in letters to the fairness department which contained their reasons for asking for relief and some would include supporting documentation, while others would not.  However, since the CRA revamped the Taxpayer Relief Program, they require that the form RC4288 be included in the package or the claim will be rejected.

Myth:  I need to be pre-qualified for the CRA Taxpayer Relief Program.

Reality: No.  You can determine if you may qualify, or you can seek a professional to help you determine if you have grounds for relief, but there is no pre-qualification of this program.

Myth: If my claim is rejected, then I have to pay the penalties and interest.

Reality:  You should make arrangements to pay the penalties and interest in any case in order to stop the interest clock from ticking should the claim be denied – wherever possible, however, the Taxpayer Relief Program allows for a second-level review to be performed (usually with additional information provided) and there is an option for judicial review should the second level review be unfavourable.

 

So take some time to look around when you are considering an application under the Taxpayer Relief Program and make sure that if you engage someone you do so for the right reasons.

Frequently Asked Tax Question Answered: How do I know if what I read about Tax Debt to the CRA is true?

This is one of the most commonly asked questions of me: How do I know if what I read on the Internet regarding debt to the Canada Revenue Agency (CRA) is true or not?

The answer is quite clear, however, complicated at the same time.

If you owe money to the CRA and you are looking for options, suggestions, or tips on the Internet, you have to pay special attention to the “Solution” options which are advertised as if they are providing legitimate advice.

The most important thing to do is to take note of the terminology used in these ads – over and over again – because the intention of these ads and blog posts are not to help you but to achieve a high SEO (search engine optimization) ranking.  These posts are written to capitalize on the number of eyes who will read that post because of the way it was written, not because it was intended to provide help to you.

Here is an example of a fear mongering ad, disguised as an article on taxes, meant to “help” you.  I am paraphrasing the content, but the example should provide a clear clue as to the true intention of the poster.

Title: Understanding Canada Revenue Agency (CRA) Tax Assessment & Arbitrary Assessments

The sample post: CRA tax assessment is when the Canada Revenue Agency conducts a review of your income taxes. The most common form of CRA tax assessment is the Notice of Assessment that is sent once the CRA has conducted a preliminary review of your tax return. There is another CRA assessment known as “arbitrary assessments.”   These assessments are also known as “notational assessments.” What this means is that, if you have not filed your taxes on time, the CRA could decide to complete and file your return for you.

Many people believe that, if you do not file your taxes, that the CRA will wait until you do file your taxes and then the CRA will penalize you by changing you penalties, fines, and interest.

This is not always true.

The CRA is able to choose to complete an arbitrary assessment in which the Canada Revenue Agency will estimate your income and the tax debt that you owe and then the CRA will charge interest on this debt as required.

The amount of tax debt that comes from a CRA arbitrary assessment will  not be as favourable to you as it would be if you completed your return yourself.

The CRA will use previous income tax statements to complete your return and will not take steps to include expenses or deductions or attempt to give you any tax breaks.

In many cases, the amount owing listed by the CRA will be very high and additional charges, penalties and interest will be charged since the assessment was late.

You will then be subject to CRA collection efforts such as a wage garnishment of up to 100% of your income, or the CRA will empty your bank account and then freeze it so you cannot use it.  They could also put a lien on your house and if you don’t pay them, sell it and keep the proceeds.

What do you do if you Receive a Notational Assessment?

If you receive an arbitrary CRA tax assessment, your options are;

1. Pay the amount listed
2. File an appeal of the assessment.
3. You can also choose to file a return yourself at this point in an attempt to reduce your tax bill, but, this will trigger a CRA audit to ensure that your tax return is filed correctly.

In addition, if the CRA does not have the information it needs in order to complete an arbitrary assessment, it can take you to court where the court can order that you complete the return and pay a court fine.

If you ignore this court order, you could be subject to contempt of court charges and go to jail.

As you can see, your best option is to contact us, and we will help solve this problem.  We have an army of former CRA staff at our disposal who deal with hundreds of these daily.

Let us help keep you out of jail and away from the prying eyes of the CRA.

 

WHEW.

After reading this, if you were not afraid of the CRA, you must be by now.  This blog post started out trying to get people looking for CRA tax solutions and slowly wound its way through a series of lies and mis-truths and took the reader straight to audit and jail.  It just stopped short of proclaiming that King Tax Man was going to descend from the clouds and throw tennis sized hail-balls at you.

This type of article is not good.  It’s not accurate, heck, some of it is not even true.  But how would you know?

What are the red flags that you should notice?

Let’s break down this article and address some of the “facts”.

First paragraph – mentions of CRA, or Canada Revenue Agency – 5 times.  This is their SEO target, clearly.

I was also alarmed that the writer was unable (or unwilling) to state what a Notice of Assessment (NOA) is, and how the CRA actually issues them.  To set the record straight, a Notice of Assessment is the computer generated form which is issued once a change occurs on someone’s tax account.  This NOA carries with it a legal warning from which the CRA are able to take collections actions.

An additional lie occurred when the author stated that your tax return is looked over once it is filed.  In truth, no one has reviewed your tax return.  The data entry group take the paper-filed returns and just enter the information in the system.  Electronically filed tax returns are run through a program aimed at identifying any obvious errors or inaccurate deductions taken.

There is the idd case where the CRA will flag and wait for your tax return, however try not filing for 20-years and being under audit regularly, and then you can get to that level.

Canada’s tax system is a self-reporting system so the information is accepted as filed, and the Audit, or Verification department are responsible for checking the information to make sure it is correct after the fact.

Another HUGE issue, is that there is a significant difference between an arbitrary assessment and a notional assessment.

Arbitrary assessments are issued for personal (T1) taxes and occur when the CRA’s non-filer group, or a CRA collector takes information on your personal tax account for that current year, plus previous years and prepare the unfiled tax return for you, less deductions.

In many cases, they are pretty accurate.

A notional assessment is specific to GST/HST and in these cases the non-filer unit or the collections unit will assess an amount owing for each period outstanding based on a suggested amount the system provides.  That suggested amount is a combination of the previous filings, and the industry or SIC code that is associated to your file.

In both cases, returns can be filed and the assessments removed, however, Notices of Objection should be attached just to provide recourse should the filings not be accepted.

Filing the missing returns does not trigger an audit.

The whole piece about the CRA taking you to court, etc., makes absolutely no sense as it’s not even true.  Arbs and Notionals are based on information in the CRA’s systems.  If the CRA doesn’t have information, they can still raise an assessment.

I suspect the writer was just trying to close out the reasons for using them by tieing in the jail / court fine, for not complying.  It’s not true at all, but it makes for a compelling story!

If the intention of the article was to really assist Taxpayers and let each and every Canadian decide if they want to pay for assistance / expertise, then all they had to do was discuss prosecution which is what the CRA can and will do if repeated attempts to file have been issued from the CRA (Demand to File) and have not produced the returns.

Maybe they didn’t know that existed…

Maybe they were not aware that failing to file is a criminal offense, if the CRA asks for the returns and they are not provided.

Certainly, they did not want you to know that failing to pay is not.

If someone looked at the above post, they would panic, contact this firm, and likely be convinced to pay a lot of money for something they could likely do themselves because they don’t want to make it worse, or go to jail.

It’s hard to get the truth out there when there are people and firms distorting the facts in order to make a profit off of taxpayers lack of understanding of how the CRA works.

Additionally, if they intentionally muddled the facts in this post to scare you into using their services, what other information have they creatively adjusted?

Or, if they believe this to be the truth, then they just don’t have the experience or expertise to know better, and do you really want to use them to represent you in dealings with the CRA?

Outcome:

I questioned the author in an online social media forum.  I said, “I’ve always understood that an arbitrary assessment was specific to T1 returns and that they were actually quite accurate because most of the information used is already posted to your T1 account, whereas a notional assessment was specific to GST/HST and those figures were based on the industry or SIC code. Can you confirm this is your understanding as well?”

He never responded…

Surprised?

I’m not.

When you have CRA tax collections problems then you need the expertise of the firm with an actual former CRA tax collector.  inTAXicating Tax Services.

Visit us at http://www.inTAXicating.ca

CRA Problems? Here is what you need to do!

Do you have problems with the Canada Revenue Agency (CRA)?

Do you owe the CRA money?

Are you behind on your personal (T1) tax filings?

Are you a business owner and you have fallen behind on payroll, GST/HST or Corporate Tax (T2) returns?

Has the CRA registered a lien against a property you own?

Have you transferred and asset and the CRA is assessing a 3rd party for your debts?

Are there garnishments on you bank account or against your wages?

Do you own a business and the CRA is contemplating Director’s liability?

Is the CRA taking you to court, and you just don’t understand if you have a case or not?

Does any of this make sense to you?

It’s complicated, it’s time sensitive and it’s extremely frustrating that the CRA would rather force you, or your business into bankruptcy that work with you, isn’t it?

Here is what you need to know before you can do anything to solve these problems:

1. If you search online using any keywords related to CRA, tax, debt, or urgency, you might wind up here (you can thank me later), or you might wind up at a trustee.  Bankruptcy firms have covered the internet with keywords aimed to make you think that the best and only option for you, is bankruptcy or a consumer proposal.  While it might be, there are SO many other options!!!  You don’t need a trustee to put you in bankruptcy in order to remove a RTP, when asking the CRA to remove it might be the way to go.
2. Just like the phone scams claiming to be from the CRA, or wanting to clear your ducts, there are many “Tax Solutions” firms out there disguised as your ideal solution, when they want your money, your trust and then you accept their advice that bankruptcy is the best option for you.  You can identify these firms this way:
   1. They buy followers on Facebook, Twitter and other social media accounts they operate.
   2. They write blog posts not intended to help you, but to scare you.
   3. They refer to the CRA as being bad, evil, and as the “Tax Man.”  That approach is proven to never work.  Even if you detest the CRA, telling them that won’t help your case.
   4. They hide their true intentions; either that they are part of a Trustee in Bankruptcy or by calling themselves fun names, to distract you from who they are and who the owners are.
3. You need to know what the CRA wants from you, and how to go about fixing it.  If you don’t know how the debt came about or what the CRA can, will, or have done to you already, then you cannot fix it, or have someone fix it for you, and,
4. You need to know what will happen to you / your company / your family, in the instance where you decide to; do nothing, pay the balance, file the returns, fully comply with the CRA or choose bankruptcy / consumer proposal.

Without knowing answers to the above 4 questions, you cannot properly fix your tax problems once and for all.

If the “solution” to your 5, 10, 15 or 20-year tax problem can be fixed in one meeting and for a fee, what exactly are you getting?

Tax problems that take years to establish, sometime take years to resolve.  Considering some of the alternatives, it’s worth it to know that your CRA problems have been resolved and you are not exchanging a CRA tax problem for a bankruptcy / consumer proposal problem.

Ask, before you begin.

info@intaxicating.ca

Tell us about your tax problems, and let us tell you what the best option for YOU is.  If the solution can be achieved through a simple action which you can do, then you get moving on it.

If it requires some expertise or assistance, then leave that up to us.

Former CRA Collections expertise to help you when you need it the most!

 

 

When is the Best Time to Resolve a CRA Tax Problem?

If you live in Southern Ontario, you are in the middle of a heat wave.  Summer came back bigger, badder, stronger than it had all summer, and with humidex readings in the low 40’s, all the talk is about cooling off and extending the cottage season.  Thinking about Tax Debt with the Canada Revenue Agency (CRA) is the last thing on your mind.

There is nothing wrong with that.

But as the calendar creeps towards October, we enter the last quarter of the year and this is traditionally the best time of year to finally seek resolution on that nagging Canada Revenue Agency (CRA) tax problem.

The tax problem that causes you so much stress that you cannot open the brown envelopes from the CRA.

The tax problem which resulted in the CRA freezing your bank account or garnishing your wages.

That nagging tax issue which prompted the CRA to register a lien against your property.

The one that prevents you from having a full night’s sleep.

Yes, that one.

Well worry no more because help is here.

No matter how big, or small, complex or simple, we have seen them all, and resolved them all.  At the very least, after a meeting with us, you will understand the truth behind your tax problem – whether you have a chance of having it overturned or whether you actually are on the hook for the balance.

After a meeting with us, you can finally start on the pathway to resolving your tax troubles and no longer worry that when you try to use your debit card it might not work because the CRA froze your bank account and withdrew all of the funds.

inTAXicating Tax Services

Contact us: info@intaxicating.ca

Toronto-based.  Canada-wide Tax Liability Specialists.

Lack of tax knowledge could be costing Quebecers: C.D. Howe Institute reports

I came across this article from the Montreal Gazette;

I strongly recommend that you take the time to read it.  It is brief, but very informative as it tells the story that I have been trying to tell for the past 20-plus years!  There is that there is a significant percentage of, not just Quebecers, but Canadians who leaving money on the table because they don’t understand the tax system, according to a report released by the C.D. Howe Institute last week.

The report — which bases many of its conclusions on a survey of 1,000 Quebecers — suggests that lack of knowledge is one of the reasons many people don’t take advantage of credits and savings vehicles, like RRSPs, which could reduce their tax burden.

“People might be missing out on benefits that they’re entitled to,” said Antoine Genest-Grégoire, a tax policy researcher at the Université de Sherbrooke and one of the authors of the report.

“It can take various forms, people can simply not know about the existence of the credit … sometimes, they know it exists but they don’t know how to use it or they find it too complicated.”

Survey participants were asked a series of questions about how the tax system works and the average score was just 55%.

It wasn’t just tax credits that left participants stumped. Respondents scored poorly on questions about progressivity — the idea that people with higher incomes pay a higher tax rate, a core principle of the Canadian income tax system.

While almost 90% of respondents knew that income tax rates differ based on how much people make, many struggled with the concept of bracketing — when different segments of an individual’s income are taxed at different rates.

“We hear a lot of people thinking that once you reach the top income brackets, you essentially pay close to 50% of your income in taxes,” Genest-Grégoire says, when in reality, it’s only the income above the cut-off for the highest tax bracket that’s taxed at the highest tax rate.

Only 26% of survey respondents were able to answer a question about that correctly.

While survey respondents generally had a good sense of whether they pay sales tax on everyday purchases, like groceries, prepared food and clothing, there were some exceptions.

For example, Quebec provincial sales tax doesn’t apply to books, a decision made to encourage literacy and support book publishers in the province. Only 21% of survey respondents knew that.

The result, Genest-Grégoire said, is that the public policy objectives of the tax exemption are unlikely to be realized.

The lack of tax literacy doesn’t just affect individuals pocketbooks, Genest-Grégoire said.
“People who don’t understand taxes tend to have lower trust in the tax system.  The Canadian tax system, even though you’re obligated by law to produce a tax return, works on trust.  The government doesn’t audit everyone,” he said. This lack of trust “makes tax avoidance, tax evasion more probable.”

Genest-Grégoire said the provincial and federal revenue agencies have taken steps to put more information online, but the system itself remains complex. One solution would be to make benefits that are currently provided through the tax system more accessible and for government to automatically enrol people, as is already the case with many benefits for children.

Warren Orlans, a former CRA Collections Employee turned Taxpayer Advocate has been saying for over a decade that the CRA needs to continue putting out information on the Internet, however it needs to be available in many different formats in order to be most effectively accessed by Canadians everywhere.  “Not everyone learns the same way, so having a concept explained in text, showing steps, and possibly with an example and even with little videos would expose the greatest number of Canadians to the message at once.”

“Every day, I deal with Canadian taxpayers and corporations of all sizes as they try to understand and interpret the CRA.  My 11-year’s experience at the CRA and 10-years outside the CRA have afforded me the ability to diagnose and resolve even the most complex of tax matters”, Orlans said.

If you need help understanding the CRA, or interpreting their letters or actions, contact the best, at inTAXicating.  Email: info@inTAXicating.ca. Or call us at 416.833.1581.

Toronto-based, Coast-to-coast tax liability expertise.

 

Happy Canada Day! Don’t Forget About Taxation!

Happy Canada Day, Canada.  You don’t look a day over 150-years-old!

Happy 150th Birthday Canada!

There are so many things to be thankful of this Canada Day, beginning with Tim Horton’s and hockey and ending with socialized medicine and peace.  But in between there is a whole lot of taxation.  Taxes you pay which go to build new arenas, which pay for medicine, which support the troops who keep us safe, and fund programs which integrates youth of all backgrounds, races, religions and income levels together in order to keep violence as low as possible.

These are the taxes we cannot avoid paying – unless we stop spending – and they are the consumption taxes (GST/HST), gas tax, liquor tax, and many more, and there are taxes on wealth, like personal income tax, as well as Corporate taxes.  There are also payroll taxes and any other fee, levy or revenue tool (all taxes but given a different name).

For the most part, these taxes are unavoidable, and as Canadians we pay them knowing that money goes back into the economy and helps people.

What I do not understand, however, is why people pay more taxes than they are required to pay, or can afford to pay, and these taxes are viewed by people in the Canada Revenue Agency (CRA) as a “stupid” or “lazy” tax and what they are referring to are penalties and interest.

It is my belief that no one should pay any penalties or interest.  Ever.  Why give the CRA more money than they are seeking through the Income Tax Act or the Excise Tax Act.

If you work with an accountant or tax preparer, there should be no reason for late filings or late remittances, or for missing out on key deductions because that representative should know you, and the industry you work in, and be able to keep you current and free of penalties and interest.

But there are many legitimate reasons why people file late, and incur penalties and watch interest accrue on their tax accounts, and these people are then hammered by the CRA and need help, which is why I created inTAXicating.  My goal here is to help you get out of the troubles that you have gotten into and by help, I mean rehabilitate you and get you current on your filings, help you reduce your balance owing, apply for taxpayer relief (fairness) if it applies to you, and get you on a remitting and reporting schedule which ensures you are never late again.

Too many firms out there have watered down the “Tax Solution” process to the point where you pay them a ton of money, they “fix” your issue and then another one pops up, all because they are experts in taking money and not experts in resolving CRA debt issues.

The best part about working with inTAXicating is having the expertise where you need it.  If your problem is with collections or enforcement then you need the person who worked in that area, and trained and managed the collectors and who can tell you the CRA’s next move before they can.

Being audited?  Recently assessed?  Don’t understand a letter?  Balance looks too high?

There is no tax situation too scary, or too difficult to figure out.  Business taxes, personal taxes, GST/HST, payroll, T2’s, provincial, federal, liens, RTP’s, appeals, VDP… We’ve seen it all, handled it all, and have been successful with it all.

Just because it’s July 1st and summertime doesn’t mean the CRA stops working too.  In fact, it’s the opposite.  With more time on their hands, the CRA’s collections staff have the time to thoroughly research tax files which have balances on them to see what they can do to ge the account paid in full.

My experience working in the CRA for almost 11-years, tells me that the majority of in depth investigations occurs during the summer months.

Make summertime the best time to resolve that nagging tax problem.

If you have a tax problem, we have a tax solution.

You can also find us on twitter @inTAXicating or on Facebook @inTAXicating

Or email us: info@intaxicating.ca

 

What are you waiting for?

Your Canada Revenue Agency (CRA) Tax Collections Questions Answered

Here are the answers to the most frequently asked CRA Tax collections questions from the past weekend:

1. Can you bribe a CRA officer in Canada?

Answer: NO.

First off, bribing a CRA officer is a criminal offense and you could quickly wind up with the RCMP at your door, or under investigation, but more realistically, the staff at the CRA tend to be lifelong civil servants and one of the great benefits of working in the civil service is the great pension.  Few civil servants are willing to even entertain the thought of giving up their pensions, let alone going to jail for someone when they have hundreds of other people to collect from.

2.   Is there GST/HST on a lien?

Answer: Let’s presume that the question is asking if there is additional GST / HST on a lien, and the lien has been registered by the Canada Revenue Agency (CRA).  In that scenario, the answer is no.

The CRA would register a lien for unpaid or unfiled (and assessed) GST / HST, and the amount used for the lien is the amount owing on the day it has been registered in Federal Court.  This fact is important because from that day forth, interest continues to accrue and accumulate on the tax account with the CRA, but the lien only reflects the amount owing at a point in time.

Often, a lien will get paid out and then the CRA’s computer system kicks out an update Notice of Assessment with an additional balance owing  and taxpayers are puzzled having just paid off a lien.

They did pay the lien.

Now they pay the rest of the balance owing.

3.   Where can I get the truth about Voluntary Disclosure?

Answer: From the CRA website, of course.  The link to the VDP section of their site is here;  http://www.cra-arc.gc.ca/voluntarydisclosures/

4.   Can I claim mileage drive to and from work at the CRA?

Answer: I hope you enjoy your career at the CRA and are not an auditor, because you should know this answer!  You cannot claim mileage driving to and from work.

From the CRA website; http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/ddctns/lns206-236/229/slry/mtrvhcl-eng.html

“If you use a motor vehicle for both employment and personal use, you can deduct only the percentage of expenses related to earning income. To support the amount you can deduct, keep a record of both the total kilometres you drove and the kilometres you drove to earn employment income. We consider driving back and forth between home and work as personal use.”

13 Ways to Know You Need New Tax Representation for your CRA Tax Issues.

Here are 13 things that should NEVER be said to someone with a Canada Revenue Agency (CRA) tax problem – from someone who claims to want to help (or just your money).

Each quote below was an actual quote uttered by a tax solution representative or accountant to a prospective client in my presence.

Sit tight, and get ready to shake your head in disbelief…

13.  “GST, HST, PST… They’re all the same.”

12.  “CRA Collectors don’t care about you.  They treat their clients like a ‘whack-a-mole’ game.  You pop your head up and they smack you on the head with a hammer.  We provide you with a helmet or advise you to stay underground until the game is over.”

11.  “You’re an alcoholic? GREAT!  Substance abuse qualifies for relief!!”

10.   “I can tell you for a fact that the Auditor General requires the CRA to close files, NOT collect money.  The benchmark is 7-years.  We can close your file in 7-years!”

9.   “You’re just a little guy! Nobody cares about you.”

8.   “If you tell the CRA anything you are shooting yourself in the feet.  That’s dumb and it hurts.”

7.   “I know the CRA have won in Tax Court, but they are wrong, and this time we have everything we need to prove them wrong!”

6.   “Just ignore them and it will all go away.”

5.   “You don’t need to speak to a Tax lawyer, or an accountant.  They’re useless.  You should never talk to the tax preparer.  Just pay us $5,000 and we can make it all go away.”

4.   “The Taxman…”

3.   “I don’t care what the CRA wants, and how soon they want it.  They’re getting what I want to give them, when I’m ready to give it to them, AND they’re going to see that I’m right and they are wrong.”

2.   “We need to reduce the amount that you owe, so I’m going to create a T2200 for you, and claim a lot of expenses that your employer has not deducted like mileage, phone, and parking.  They’ll never know its not true and on the off-chance that they ask, I have hundreds of parking receipts in my car I can give them.  It’s perfectly fine…”

1.   “Don’t even bother opening that envelope… Just throw it out.”

 

Just missing this list, but barely, is the commonly uttered line; “Quick, transfer the house out of your name before the CRA registers a lien against it!”

When you need new representation, contact us at info@inTAXicating.ca