The Canada Revenue Agency goes after everyone who evades taxes. It won’t let you go on with your life while not filing your tax returns. Some people think that they can get away with evading taxes but they pay the heftiest price when they face the harshest tax collection methods. The CRA bank freeze is just as bad as the CRA wage garnishment.
Both freeze your income so that you do not have access to it any longer. A frozen bank account is perhaps the most disruptive CRA punishment you can go through. Can you imagine walking into a bank to withdraw some money for personal or business use only to find out that the bank has frozen it?
Like most people you would feel excessively tortured and punished. One good thing about the CRA bank freeze is that it is not done without a special notice. It is within the Canada Revenue Agency’s tax collection protocol to take the following actions:-
- Send a written notification to a taxpayer who has outstanding tax returns.
- Send a letter ordering you to pay your tax debt in full.
- Send a Requirement to Pay to you and to your bank. It is a special letter telling you about the unfortunate CRA bank freeze.
Note that as soon as your bank receives this letter it will immediately freeze your funds. It does not matter the amount you have in the account. All the cash in your bank account will be inaccessible. The bank will not listen to your personal reasons as to why you must withdraw some cash. If you suffer a CRA bank freeze you have to look for alternative means of survival for several months.
The bank will send whatever you have in the account to the tax collector in one month’s time. What is even more annoying is that after the bank has sent the money to the CRA the account will continue being frozen. Now if your employer or clients deposit your money into this account that has suffered a CRA bank freeze, you will face a significant period of distraction. Every other pay check you will receive through the bank will be deposited directly to the Canada Revenue Agency.
Perhaps the only route you can take after a CRA bank freeze is to open a brand new bank account with another financial institution. Dealing with the same institution that has withheld your funds will become very difficult. This freeze will tarnish your reputation to them and this could mean not receiving any more credit from them. They could even close any loan applications you had submitted for fear that you will fail to pay them just like you have failed to pay your taxes.
What’s more, the bank knows that many people who are put under the CRA bank freeze eventually file for bankruptcy. Thus our advice to you is that when you start getting notifications from the tax collector you should do something about it. If you are not sure what to do then just seek assistance from a tax professional.