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So You Have Filed Your Income Taxes and You Owe – Now What?

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So You Have Filed Your Income Taxes and You Owe – Now What?

wage garnishmentSo you’ve made it through income tax time but you know you are going to owe – now what?

Your first step is going to be to take a good hard look at your budget. CRA will want to be paid in full so that should be your first goal. If this goal is unattainable, that means that some negotiation with CRA is going to be involved. This can be very tricky because when speaking with them, the first thing they will try to do is get you to share personal information with them that they can then use against you later when trying to collect the tax debt.

Here are some examples:

• Where do you work? = wage garnishment
• Where do you bank? = frozen bank account
• Where do you live? = property lien

In fact, the most dangerous CRA agents are actually the nice ones! Through one casual conversation, during which you are just trying to be friendly and compliant, these agents can extract enough information from you to do some serious damage. Then, after you’ve made your disclosure, they will turn around and demand a monthly payment in excess of what you can afford to pay monthly or they suggest that you start liquidating assets to pay them.

This is why negotiating with CRA directly is never recommended.

Aside from trying to charm information out of you on the phone, agents will often appear to entertain the idea of a payment plan IF you complete their financial disclosure statement. This statement basically discloses every asset, investment and income/income source you have. This is, by far, one of the most dangerous CRA forms.

If you have a tax debt that you know you can’t pay in full, your best bet is to obtain some professional guidance. Perhaps there is some way you can pay the debt and therefore negotiate, but perhaps there is not and you will require additional protection against the powerful CRA.

Most action that CRA can take can be taken without warning you, nor do they need a court order. From the point when your return is assessed to the point when your account is assigned to a collection officer is only about 3-6 months, so time is of the essence. Waiting until you are on CRA’s radar to formulate a plan is not recommended.

Get a jump start on finding a solution for your tax debt and see the light at the end of the tunnel sooner rather than later. DebtCare can help you negotiate with, and protect yourself from, CRA. Call us today at 1-888-890-0888.

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