For many people their taxes are over and done with for another year. For others the tax issue is an ongoing thing. These are the individuals who have gotten themselves into a tax mess that is snowballing. While almost any type of debt involves interest, the mounting interest on a tax debt seems much more overwhelming. This is partly because nobody likes to have to deal with the CRA. They are an intimidating agency, although the Canadian government is trying to build up a better relationship with the taxpayer and this tax collection agency.
We have talked before about what it is like to be in a tax problem and what you can do about it. This was a while back, so has anything really changed in regards to those that are having tax problems?
Basically when it comes to tax debt collection the CRA is still on track and every bit as aggressive. They are now quite astute at publicising the names of those who have been found guilty of failure to file. One might say this is a scare tactic, and is most embarrassing for the indicated taxpayer. However, the CRA views this type of information as being publically available through the court records. They are using it to their advantage perhaps as a warning to others who are similar situations.
What it comes down to is you do not want to mess around with the CRA like you might with other types of creditors. Having said that, there are plenty of resources to help you handle this debt.
The first thing you want to do is look at exactly what your situation is. It may be that you just didn’t have the money to pay what you owed when you filed this past year’s taxes. Then what you need to do is get on the phone to the CRA and see what you can negotiate by way of payments. Normally they like to see a tax debt cleared up within six months. This may not be possible and you may have to look at other alternatives.
If you are avoiding paying the taxes because you don’t believe you owe them, then start taking the proper course of action. Appeal the situation to the CRA following the proper procedures. Or, speak to a tax lawyer. It may even be enough for you to review your tax situation with an accountant who can further explain the situation to you.
If you are purposely avoiding paying taxes then you are playing a dangerous game. The CRA has the new snitch program, so you never know who may turn you in. The penalties and legal action that can be taken against you are powerful. It simply is not worth ruining your future over the fact that you don’t want to pay taxes.
