Category Archives: Tax Installment Plan

Setting up Tax Payment Plans with CRA

When the CRA processes your income tax return, it will send you a Notice of Assessment. This Notice of Assessment will show a tax balance that you owe to the CRA and it is possible that you may not be in a position to pay this amount immediately and in one lump sum. When you cannot pay the amount owed, you can get professional help by contacting a tax service office to set up a tax payment plan schedule which will be mutually acceptable to you and the CRA.

It is crucial on your part to let the CRA know about your payment problem. It’s important to work out a tax payment plan schedule as early as possible. If you fail to do so, compound interest will be charged to you on the unpaid tax balance and the interest penalty will begin from the annual filing deadline. It will continue until the full tax amount is paid.

The CRA allows taxpayers to pay their tax amounts in installments if they can prove financial hardship. These taxpayers will then be required to pay their income tax amounts in regular installments within the financial year according to a tax payment plan they will submit rather than paying a lump sum amount on 30th April. This takes place when insufficient income tax is withheld from their earnings over the course of a financial year.

Common sources of income that may cause such a situation are rental income, self-employment income, investment income, income from more than one source of employment and some pension payments.

Once a tax payment plan is negotiated, you can remember that income tax installments can be paid by sending post-dated cheques to the CRA or through the `My Payment’ service or through your financial institution.

The tax payment plan can also be worked out with the CRA as a pre-authorized payment plan. The installment payments that are pre-authorized can be debited from your bank account. This kind of a pre-authorized tax payment plan can be arranged with the assigned CRA collection agent. You can also complete the pre-authorized tax payment plan through the monthly Installment Payments and mail it to the CRA. Once a tax payment is settled with CRA, you are required to make steady payment as agreed on. Default payment, even once, may jeopardize the validity of the negotiated tax payment plan.


Working out a Tax Payment Plan with CRA

If you are facing a tax audit or have a huge tax debt to settle with the CRA, you need professional help to work out a tax payment plan with CRA. Some people run into financial difficulties and do not put aside sufficient money to pay the year end taxes. They should be proactive and keep themselves ready to negotiate a tax payment plan with CRA.

In a situation where you are not able to set aside the money that you need to pay your tax bills, you have to remain calm and take help to work out a tax payment plan with CRA. You can do nothing at first but wait for the notice of assessment to arrive from the CRA in your mail.

You may then seek professional help to get in touch with the collection department and suggest a tax payment plan with CRA. The professional tax consultants then aim to build up a relationship with the collection agent of the CRA while handling the process of your tax audit.

You have to be honest enough with your tax consultant and apprise him or her of your actual tax situation. You cannot promise more than what you can muster. Once you work out a tax payment plan with CRA, you have to stick by it. If you default with that plan, immediate action can be taken against you by the CRA and they can freeze your bank accounts. The idea is to be truthful in working out a tax payment plan with CRA.

When you are trying to negotiate individual or corporate taxes, it is better to come up with a tax payment plan with CRA that gets them their tax dues within a period of six months. When this is the case, you will find that the CRA collection agencies would be quite patient with you.

If you are a director of a corporation and even if you are not active in that corporation, you could be held liable for the HST trust money and the payroll taxes. You could face serious penalties if you are failing in your job as a director while not making sure that the tax money is being remitted properly. It is always safer to consult professionals so that there is a tax payment plan with CRA.

When working out a tax payment plan with CRA, you have to be sure of the installments that you fix. These installments are those periodic tax payments that you have to settle to the CRA on fixed dates to cover your tax dues that you would have otherwise paid as a lump sum amount on 30th April of the following year. Installments are never paid as an advance. They are settled throughout a calendar year in which you have earned your taxable income.

When working out a tax payment plan with CRA, you have the choice of three installment options. The first is a no-calculation option which may suit you if your income and deductions stay constant every year. The second is the `prior year’ option which may suit you if your current year’s income is similar to that of the previous year. The third is the `current year’ option which may suit you if your income and deductions are considerably different from the previous couple of years.

How the CRA Collections System works?

How the CRA Collections System works?

Since 1st August, 2005, the Canada Revenue Agency (CRA) has been given the responsibility of the cra collections of tax debts which was previously being handles by the Human Resources and Social Development Canada (HRSDC). CRA collection has the accountability for tax debts that are due to HRSDC through student loans, employment insurance, old age security, employment programs and Canada Pension Plan.

When the tax assessment or a reassessment is not paid, the balances which are unpaid are drawn from the relevant accounting system and these balances turn into collection accounts. There is a distinct accounting system for each line of revenue. The lines of revenue are corporate tax, personal income tax, Goods and Services Tax (GST) and salary deductions by all employers.

CRA Collections Agency

CRA Collections agency has to recover the entire balance of tax debts or make arrangements through individual payment plans from defaulters to recover the tax debt within a specified period of time. Recourse to legal action is taken when the defaulters are not able to arrange the filing of their tax returns. The kind of legal actions that can apply include certification of the debt in federal courts, garnishing of wages and accounts receivables, placing a lien on the assets of the taxpayer, setting off the tax debt against other government payments and seizing the assets of the taxpayer.

CRA Collections Agency can also take the tax defaulters and debtors to court in order to collect the debt which has not been paid. The procedures used by CRA Collections agencies to collect the outstanding tax debt amounts could be a combination of both automated and manual intervention. The CRA collection procedures may involve sending computer-generated letters, making reminder telephone calls, organizing field visits by the agents and sending legal notices.

The CRA collection activities take place through the Revenue Enforcement Management Information Tracking System (REMITS). This is done through a national collection call centre in the capital city of Ottawa and at eight other locations that organize collection for personal tax and Goods & Services Tax. The mode of collection will be determined by CRA collection authorities depending on the complexity as well as the size of an account.

REMITS of CRA collections arranges letters to all the tax debtors and takes care of specified accounts for which prior arrangements have been made. The call centre of CRA collection is responsible for outbound calls principally to those tax debtors whose outstanding amounts are below a specified dollar limit. The call centre is equipped with a telephone calling system which enables it to dial out to taxpayers automatically. The national pools make these outbound calls not considering any specific geographic boundaries for both individual tax and the Goods & Services Tax below a specified dollar limit.

CRA collection pools also conduct restricted enforcement actions such as garnishing the wages or accounts receivables of the taxpayers. The Tax Service Offices handle the more complicated accounts and conduct a range of legal enforcement like the seizing of assets or placement of liens on the properties of the tax defaulters.

CRA Tax Payment Plan Negotiation

When do you need a CRA Tax Payment Plan?

When taxpayers owe taxes and do not deal with promptly, not only will they be putting themselves in serious trouble, but they will also see the amount of money that they owe rapidly increase due to daily compounding interest charges and penalties.

The CRA has many ways to retrieve the tax owing and the CRA will not hesitate to follow through on aggressive collections practices even take legal actions against taxpayers in the absence of a CRA tax payment plan. The CRA can put liens against a delinquent taxpayer’s property, they can direct sheriffs to sell taxpayers’ assets, freeze taxpayer’s bank accounts or they can garnish income. Dealing with taxes owing or negotiating a CRA tax payment plan with aggressive CRA collection agent can be intimidating for anyone.

Why get professional help with the CRA tax payment plan?

Neglecting to pay taxes is a serious matter. If the tax problems have been a lingering problems for years, then the penalties and daily compounded interest alone are way too overwhelming to pay off easily, which in turn will lead to potential legal actions by CRA in the attempt to collect the taxes. For this reason, the help of a tax professional is very important.

Seasoned tax professionals will be able to perform effective negotiation on your behalf with CRA. Well negotiated CRA tax payment plan can be a good option for taxpayers who are struggling to deal with typically aggressive tax collection agents on their own.

No one will be able to get away with not paying their taxes. But having a professional on the job that can work with the CRA before a client loses property or sees their credit rating severely damaged can make all the differences.

What you need to do immediately to get a CRA tax payment plan negotiated?

If you owe large tax amount that are beyond your means and you are under stressful collection pursuing by CRA. Then it is time for you to find tax professionals to negotiate a CRA tax payment plan with the CRA collection agents before any legal actions are initiated against you.

It makes far more sense, and will be less costly, to resolve your tax problem with the tax man right away, rather than dealing with the financial burden of wage garnishment, bank levy or other penalties later.

The first step is to stop procrastinating and running. Take action today!

Hire someone who is qualified and has the experience to help you solve tax  problems. Many people try to get the CRA tax payment plan themselves, resulting in negative results.

Get a CRA Tax Payment Plan negotiated for you TODAY by calling Tax 911 Now team at 877-918-2991.

Leveraging on the knowledge and experiences in dealing with tax collection agencies in all the years, Tax 911 Now’s team of professionals has helped many clients with tax owing problems like you to negotiate CRA tax payment plans that are satisfactory to the clients who in turn shared their positive experiences and appreciation in their testimonials.

Our Free No Obligation Consultation & Rate Guarantee

To begin with, we offer first time RISK FREE unlimited time consultation just to help you to understand the depth of your tax owing problems. We will also provide you the recommended steps to take to prevent the tax problem from escalating into legal battles. It is no obligation and it is completely up to you to decide what to do from there.

Get a consultation with our experts if you are in the following cities in Canada:

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If you do decide to engage us to help you with the CRA tax payment plan negotiation, we provide rate guarantee within the entire tax negotiation industry.

Act TODAY by calling Tax 911 Now team at 877-918-2991 or complete the inquiry form at top left of the page.