The Canada Revenue Agency has many ways to deal with tax payers who evade taxes. The CRA income garnishments represent just one of the scariest methods the organization uses to collect pending taxes. The Canadian Income Tax Act gives the CRA the mandate to demand a garnishment of wages from your employer.
If you owe the organization money, and you are doing nothing about it, chances are that you will face CRA income garnishments of up to fifty percent of your salary. There are instances when the imposed garnishment will rise up to one hundred percent of your sub-contractor income or any other types of incomes you own. By issuing a notice of wage garnishment to your employer, the CRA does what the law permits. It cannot be taken to court.
Not only will they send the notice to your employer but will also demand receivables meant for you from your business associates. CRA income garnishments can certainly be embarrassing and stressful. They can disrupt your personal finances and make your business collapse.
What will happen before CRA income Garnishments?
The Canadian tax collector will not garnish your wages without a notice. It will, in fact, send a series of notices including first the tax debt notification. This notice will remind you that you have unpaid taxes. If you do not respond, the CRA will send a second notification demanding that you pay your pending taxes in full. If still you do not respond they will send a third notice about payment and it will be final.
The fourth notification you get shortly after not showing concern to all the first three notices will tell you about the CRA income Garnishments. It will inform you that the CRA is about to garnish your wages.
If still you do nothing about the notices, the organization will now act according to the law. It will garnish your wages and pass on your payment directly to the Canada Revenue Agency account.
Can you get a relief?
It is the CRA itself that can negotiate on your levy and it won’t do it so easily. If you can file all your delinquent tax returns and regain other forms of compliance then perhaps you can open grounds for negotiation.
This is not work you want to do personally as it is difficult. There are Canadian tax firms that can regain compliance and negotiate an affordable payment plan on your behalf. Local firms that are familiar with different forms of CRA income garnishments can assist you. If all possibilities of paying off your tax debts via a negotiated plan fail the firm can negotiate a Taxpayer Relief plan instead. But you must qualify for tax relief as well.
Can your wages be saved from being garnished by CRA?
The fact that CRA will follow you everywhere if you owe them is indisputable. As stated above, CRA income garnishments are not levied suddenly. This gives you an opportunity to seek professional help prior to a wage garnishment.