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