Tax Debt: If you cannot pay in full, part 1

by in Tax Advice Information and Updates
Tax Debt:  If you cannot pay in full, part 1
If you owe taxes and cannot pay in full, the first thing you would need to do is contact the CRA.  Remember, if you are unable to pay your tax debt in full and on time, the CRA may charge interest compounded daily at the prescribed rate on any amount owing until you have paid the amount in full.

The CRA offers options to individuals and businesses who are unable to meet their payment responsibilities. 

As an individual, if you cannot pay your tax debt in full, you may qualify for a payment arrangement or ask for taxpayer relief.

Payment Arrangement

A payment arrangement is an agreement you can make with the CRA and allows you to make smaller payments over time until you have paid your entire debt including applicable interest.

To qualify for a payment arrangement, you will need to show that you have tried to pay your debt in full by borrowing money or reducing your expenses.  The CRA may ask you to provide proof of your income, expenses, assets and liabilities.  You may have to do this over the phone or by completing a financial questionnaire.  It is important to note that the CRA will never request this information by email.

If you miss a payment or have any unfiled tax returns, the CRA can opt to cancel the payment arrangement and take action to recover your debt.

You can set up a payment arrangement by pre-authorized debit, teleArrangement (1-866-256-1147) or speaking with a CRA collections call centre agent (1-888-863-8657). 

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Guest Friday, 25 May 2018

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