Once upon a time, this cup much like a bank account was filled to the brim, and a juicy olive accompanied the penniless toothpick that now quietly rests on the desk….
There is nothing quite like receiving the little brown envelope from the Canada Revenue Agency (CRA) reminding you that you have tax debt. It makes you realize this empty cup is a depressingly on-point indication of your current financial situation.
Instead of sitting around feeling sorry for yourself here is what you should do:
- Make a payment arrangement: Call the CRA and set up an agreement to make smaller payments over time until your debt and applicable interest is paid. Ignoring the CRA will only amp up any financial and/ or legal consequences. IMPORTANT: The CRA may also charge interest compounded daily at the prescribed rate on any amount owing until your balance is paid in full.
- Here are three ways you can work with CRA to set up a payment agreement today. Remember, no one likes to be ignored so pick up the phone NOW.
- Considering bankruptcy? This is not a decision you should make lightly as it follows you for life. If this is an option you are considering, go to the Office of the Superintendent of Bankruptcy for more information and to discuss options before committing to this solution.
- Are You Business owner? You might qualify for taxpayer relief from penalties and interest charges and reduce the total amount you or your business owes. See Taxpayer relief provisions if your business qualifies.
- Financial hardship provisions: Does your debt repayment make it hard for you to pay for food, utilities, housing, and other life essentials? You may qualify for help under the financial hardship provisions.
- It is your responsibility to contact the CRA if repaying your debt is causing you financial hardship. The CRA will take your situation into account when reviewing your request. For more information and to see if you qualify, call 1-866-864-5823.
To ensure you don’t end up in the same situation next year we recommend talking to a tax consultant right away so that you can plan accordingly.