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Looking for CRA Help with your Tax Debt?

If you’re struggling with tax debt, you’re likely looking for any option that is available to you. You may also be wondering if there are any CRA help options that can make it easier to repay the debt that you owe.

Repaying tax debt can be very stressful, especially if you have not filed or paid your taxes in many years. Not only will this mean that that you could owe a lot of money just by virtue of it being several years since you paid, but you could also be faced with considerable penalties and interest charges. The CRA charges penalties for filing late and for paying your tax bill late, and continues to charge interest the longer you take to settle your tax problem. These costs certainly add up, which can cause people to search for CRA assistance to make it easier to deal with the situation.

It’s important to know that, while there are official CRA help options available, none of these options will reduce the overall amount that you owe. The CRA will never negotiate or reduce the outstanding tax debt that is owed, outside of a bankruptcy or consumer proposal. Your tax debt is money that the CRA knows is owed and it will not accept less.

However, despite that, there is CRA assistance available.

Available Help From the CRA

There are potential ways that you can get assistance with your tax debt from the CRA. Canada Revenue Agency help options include:

  • The Voluntary Disclose Program
    • This is a CRA help option that is designed to give people a “second chance” to change a tax return that has been previously filed or file a return that should have already been filed. This program can potentially provide relief from prosecution and penalties.
    • However, you will need to apply for this CRA assistance before the CRA comes to you asking about your returns and requesting payment. If you are looking for CRA help with tax debt after that CRA has already taken compliance action against you, this program is not the right one for you.
  • Taxpayer Relief
    • If you are having financial trouble repaying your tax debt, there is CRA help available in the form of taxpayer relief provisions. If extraordinary circumstances (such as natural or man-made disasters), CRA delays, or extreme financial hardship have made it impossible to meet your tax obligations, the CRA may consider cancelling or waiving interest penalties and charges. However, you may be asked to prove why you are unable to pay your tax debt in full before receiving this CRA assistance.
  • A CRA Payment Plan
    • CRA help is also available in the form of a payment plan. As mentioned, remember that the CRA will not reduce the overall amount that is owed. However, it may consider receiving payments in monthly installments rather than requiring the payment in one lump sum.
    • Before the CRA will consider a payment plan, it will require detailed financial information such as your income, expenses, assets and liabilities. While it may seem reasonable to request this information, keep in mind that these details will be used as the basis of your payment plan.
    • With this form of CRA help, it’s crucial to know that the CRA will want to receive the money it is owed first, before you repay other debts. Therefore, the payment plan that is proposed could result in you ending up with penalties and charges from other creditors. For example, the agency may require you to pay only the minimum payments on your credit cards so that more money can be allocated to repaying your tax debt. This could be very costly as credit cards often have very high interest rates.

Before attempting to apply for or receive any of these CRA help options, you’ll want to make sure that you fully understand them. CRA help programs can sometimes be complicated, despite appearing very straightforward and simple at first.

Whenever you are dealing with a government agency, especially the Canada Revenue Agency, there are there is always a lot of complexity, red tape, and detailed processes involved. Therefore, it is in your best interest to speak with an experience professional before applying for or requesting CRA help.