Dealing with the CRA

How do you deal with the Canada Revenue Agency (“CRA”)? This question often arises during client meetings. Our answer is simple, “Co-operate and Communicate”.

When a client calls us screaming that they have just received a demand letter to pay an outstanding tax balance, or that the CRA has just registered their tax liability in federal court, we find out that more times than not it is because the taxpayer (client) failed to respond to numerous letters or return a series of telephone calls from the CRA.

We are on the taxpayer’s side and will fight tooth and nail to lower taxes and appeal issues that are defensible, but it is very tough for us to defend a client’s position when they have completely ignored the CRA’s attempts to communicate.

If you owe tax and cannot pay, simply call the CRA and tell them that “I cannot pay at this time”. The CRA will then ask you when a payment will be forthcoming. Generally, if you can chip away at the tax debt they will not take legal action. However, payment arrangements must be reasonable. For example, if you owe $20,000 in taxes, the CRA will not consider a monthly payment of $10 as being reasonable.

To learn more about how to deal with the CRA, please give us a call.

NOTE: The Shannon & Company 'Tips' are NOT intended to cover all tax issues. You should talk to your Shannon & Company professional before making any decisions regarding the information found here.


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