The Canada Revenue Agency can utilize many tools to recover the taxes you have not paid. The problem with the CRA tools is that they can easily leave you financially and legally destroyed. Until you have either paid your tax debt in full or your tax consultant has shown that the case is causing you excessive hardship the CRA cannot withdraw its charges. The CRA income garnishment could cause you a lot of financial struggles.
Many taxpayers have large tax debts owing due to many life circumstance. If unpaid taxes status remains for too long, taxpayers in arrears will likely get a CRA income garnishment because of the tax debts owing. The Canada Revenue Agency works for the government directly and it has the power to get your taxes collected. They can choose not to take your case to court and freeze your funds instead.
The longer you wait to pay your taxes the higher your chances are for receiving a CRA income garnishment. A garnishment is one method used by the tax collector to seize your earnings. If you let them garnish your income, any appeals you make to them will fall on deaf ears. They will not care whether your business, job or family is at risk. The CRA, just like other tax collectors across the world, does not loosen its grip.
How does the CRA Income garnishment work?
Half of your employment income and one hundred percent of other income streams you have can be garnished by the CRA. This includes even your sub-contractor salary. Besides getting in touch with your employer, the CRA tax collector could send demands to your business associates or clients asking them to re-direct your receivables. The bank account that is linked with your employment income is literally possessed by the CRA until your debt is over. Before such an action is taken you will have received a letter called the Requirement To Pay. In case you decide to ignore this letter, and wait for the agency representative to call, be ready to face a CRA income garnishment.
If you cannot make more money than the value of your basic necessities, the CRA income garnishment will still be imposed on you. So it will be up to you to find other sources of income while the taxman takes away your current income to pay your taxes.
How to stop a CRA income garnishment?
There are some ways to stop a CRA income garnishment. The most adopted one is to negotiate an affordable tax payment plan. It is not an straightforward process, however, as it involves lot of financial analysis, strategy planning, and tactical negotiation with the CRA collection agent. Many taxpayers have accomplished such mission under the help of experienced tax professionals.