The CRA financial disclosure form is a dangerous form that the CRA routinely sends out. If one is provided to you by the CRA, it might be time to acknowledge that they are getting ready to take collection action against you (if they haven’t already).
The CRA financial disclosure form is a few pages long and asks you for information about where you work, information about your spouse’s income, information about your household income and expenses, information about where you bank, what assets you have (this could include your home, vehicles, investments like RRSPs), and more.
The most common instance where the CRA will ask the taxpayer to complete one of these forms is when the taxpayer is trying to negotiate a payment plan with them. Here is why this is a dangerous CRA form.
- You have a tax debt of $45,000 and based on your budget you propose to the CRA a payment plan of $750.00 per month.
- The CRA says they will consider your offer if you fill out a financial disclosure form.
- You fill it out and include all of your expenses, like your car and credit card payments. Once all is said and done you have $750.00 per month of income left over and so, on that basis, you are offering it all to the CRA.
- Once the CRA receives the financial disclosure form they advise you that their payment should come before all other creditors so the amounts that you pay to your loans and credit cards should be added to the $750.00 per mo. you are offering and that they want you to pay $1500.00 per month.
Well, if you did this you would ruin your credit because you would not be able to make payments to your other creditors. The problem now is that you have completed a financial disclosure form and provided the CRA with all the information they need to garnish your income, freeze your bank account and place a lien on your property.
Once a CRA tax debt is owed it can be very difficult for the taxpayer to negotiate directly with the CRA and that is why, when the CRA starts sending you forms like a financial disclosure form, you should seek out a professional opinion and even representation. Even if you think the CRA agent seems nice or friendly, they are not your friend – they work for the government and it is their job to collect the tax debt you owe and close their file. A company who has expertise representing people with these types of tax problems should have no problem negotiating a fair repayment plan that you can afford and that the CRA will accept and also limit what information is disclosed to the CRA about you.
If the CRA is asking you to fill out a financial disclosure form or you have a tax problem and need help, please visit www.taxsolutionscanada.com or call us at 1-888-868-1400.