What happens if I owe tax to Canada Revenue Agency (CRA) and I can’t afford to pay it?

Whether you are an individual, a business or a corporation, CRA requires you to file an annual tax return; but, what happens if you receive your Notice of Assessment (NOA) and you are owing money to CRA and you can’t afford to pay?

CRA’s tax policies require individuals to pay all tax balances on time and in full. If you find yourself in a situation where you feel you can’t afford to pay, the following is list of considerations CRA considers in determining your ability to pay:

1. Pay the tax obligation in full
2. If you can’t pay the balance in full, liquidate assets and investments in order to pay the debt in full
3. If you have no assets to liquidate, you may be eligible to enter into a payment arrangement with the CRA collections department, but they will require full financial disclosure of all your assets, income and expenses in order to come to a mutually acceptable payment arrangement
4. If you have assets but not liquidity, CRA may require security to be pledged up to the amount of your tax balance owing

Contact SamLaw and let us help you navigate your collections dilemmas. We can help negotiate the best financial situation for you and/or your business to address your CRA tax obligations.