Stop CRA Garnishments
Need to stop a CRA garnishment? Its vital to know what your dealing with. A CRA garnishment is a effective measure of enforcement used by the CRA to collect taxes owed to it. If you understand the cra garnishment rules and the cra garnishment limits, you know that their are ways to stop a CRA garnishment.
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Stopping a CRA Garnishment
A CRA Payroll Garnishment Notice can seriously restrict your income, making it tough to afford your expenses. We can help stop a CRA garnishment.
CRA Garnishment Rules
If you do not pay the tax debt that you owe, the Canada Revenue Agency (CRA) has very strong powers that it can use to collect. One of these methods is CRA garnishment. This means that the CRA can request that your employer direct some of your paycheque to the agency instead of giving it to you. The CRA can also do the same for your bank account.
If your employer receives a CRA payroll garnishment notice, it has no choice but to comply. The same goes for a bank.
It’s also important to note that the CRA can take enforcement action against you without going to court. This is a huge power that they have – every other creditor must get a court order first before being able to take enforcement action. The CRA does not need to warn you or get a court order to come after you.
When the CRA takes enforcement action against you, imposing a CRA garnishment for example, it can be impossible to get them to reduce or lift the enforcement action on your own. You could be experiencing extreme financial hardship or your job or business could be at risk, but it won’t matter, because once the CRA tightens their grip you will find it difficult to get them to loosen it.
CRA Garnishment Limits: How Much Can CRA Garnish?
How much can CRA garnish? If you are employed and have taxes deducted at the source, the CRA garnishment can be applied on up to 50% of your earnings. This means that potentially half of your income could be directed to the CRA! As you can assume, it is very tough to survive financially on only 50% of your income, however, this is what CRA garnishment rules state is possible. Many people who have their wages garnished by the CRA wind up in significant financial trouble due to the loss of income.
However, if you have other income, such as self-employment income, the CRA can send notice to your clients to redirect all payments to the agency. This means you could lose 100% of your invoices to the CRA. On top of the financial disaster that this can cause, a CRA garnishment notice can also harm your reputation. If your clients are told that you have not paid your taxes, this could cause them to think less of you and your work, which can lead to lost business.
Dealing with The CRA How To Stop A CRA Garnishment
As you can see, CRA garnishment is a serious issue. If the CRA is taking action against you, click here to contact us now. We routinely negotiate the reduction and removal of enforcement measures which include:
- As mentioned, the CRA can impose a garnishment of up to 50% of employment income and up to 100% of other types of income including sub-contractor income. They can also send a demand to the clients of businesses or business owners to re-direct receivables to them. A CRA garnishment is embarrassing, can cause major financial disruption, and can cause irreparable harm to a business and/or business owner. If the CRA is garnishing you or threatening you, this situation must be dealt with properly and quickly.
Requirement to Pay – Frozen Bank Account
- When the CRA (Canada Revenue Agency) decides to freeze a bank account they will send you and the bank a letter called a “Requirement to Pay”. This letter will indicate the amount of the tax debt, the terms of the “Requirement to Pay,” and it will direct the bank to freeze your bank account. The bank will then hold the frozen funds for a period of time and then forward them to the CRA.
- If your bank account is frozen, you will be left with:
- No way to pay your bills
- No way to conduct business
- Nowhere to deposit your income
- If you want to avoid a Requirement to Pay or get one lifted, click here to request a free consultation with our team.
- If you own a home the CRA (Canada Revenue Agency) can register a property lien against you at any time. However, unlike other CRA garnishment action, the CRA must first obtain a certificate against you, and then register it in the Federal Court of Canada.
- A tax lien will cause you major problems. You will have difficulty selling or refinancing your home until you have paid the lien or resolved your tax problem. Existing mortgage holders will also be notified of the lien and this may damage your relationship with them.
- If the tax lien is greater than the equity in your home, this represents an even larger challenge because existing mortgage holders will not be able to renew without the CRA moving into first position on title.
- This means that if you have a lien on your property you should be looking for a solution to deal with it well before any existing mortgages that you have on your home come up for renewal. We are often successful at negotiating the postponement and removal of liens imposed by the CRA.
The CRA can also deploy multiple enforcement actions against a single taxpayer with respect to a single tax problem.For example, if you owe the CRA $50,000, they could freeze your bank account, place a lien on your home, and impose a CRA garnishment. Farber Tax Solutions is made up of experienced ex-CRA, accounting, and legal professionals. We are your best defence against the CRA. A CRA garnishment, or a threat of garnishment, must be dealt with quickly so that you do not lose your income or your bank account.
CRA garnishment limits state that the agency can garnish a significant portion of your income, and you will not want to go long without your money However, the situation must also be dealt with correctly. Even a small misstep can potentially result in serious trouble. Communicating with the CRA can be frustrating and time-consuming, so you’ll want to have experienced professionals on your side.
Farber Tax Solutions can help you successfully deal with CRA problems. We utilize the experience of our tax experts to:
- 1| Offer a comprehensive solution that is focused on achieving the most favourable possible outcome for your tax issue;
- 2| Communicate with the CRA on your behalf and navigate the entire CRA dispute process; and
- 3| Offer a complete solution to your tax problems, including ex-CRA professionals, lawyers, and experienced accountants.
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