Tag Archives: CRA Collection

Getting Support When Facing CRA Collection Problems

When you have a tax bill to pay it is important that you do not ignore it.  Ideally it will be paid right away but if there are problems, speak to someone right away so as there can be a process put in place that will allow you to meet your obligations and not end up without enough money to live on. CRA collection is going to happen and it is to your advantage to make sure that it happens the way that is best for you.

Not getting organised will not prevent CRA collection and there will be penalties if you are late paying, and the longer the delay the worse the penalties will be. There may be the chance that CRA are wrong and you do not owe as much, so firstly have this amount checked and once there is a figure agreed then this is the amount the CRA collection will want to get from you.

Once the CRA are aware that you are not making payments, then they will start proceedings to collect the money. It is at this stage that you need to have someone who can help you and by employing a tax expert who will deal with the CRA and save you from the discomfort that their questioning may bring. There is often a risk that tax paid via CRA collection in installments will lead to you paying more than if it was paid right away.

While not impossible to deal with the CRA alone, it is advisable to retain help as they are familiar with the way the system works.  CRA collection can be harsh and if there are problems when the program is in place you can find that you are getting deeper into trouble and will not only have additional costs added to the account but could end up with your employer becoming aware of the issue. Money can be taken from your wages and even your house can become part of the deal. It is also possible that your bank account will be frozen so you will not have access to any of your funds. When it comes to the tax you owe, CRA collection will not stop until the entire amount has been paid off.

While CRA collection officers are going to do all they can to make sure that your tax debt is the one that is dealt with ahead of any others that you may have. By neglecting others, you could find that you are getting into trouble with any companies that you have loans or credit cards with as you may be struggling to make your payment to them.

It will only be with expert help that you can negotiate the minefield that is the law surrounding tax collection. Once you have someone who understands the procedure and has dealt with numerous cases, that you can become more relaxed about CRA collection.

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.