The most obvious answer is paying your taxes in full and on time. However, if you find yourself experiencing financial hardship where you cannot pay the taxes the CRA has determined is owed to the Canadian government, then you do have options:
1. Contact a tax lawyer who will negotiate with the Canada Revenue Agency on your behalf for a payment plan that is fair and within your capabilities. Yes, you can call the CRA and attempt to do this yourself, but it makes more sense to invest a little now for a good tax lawyer, who has extensive experience negotiating with CRA agents, and save money in the long run since a tax lawyer will, in many cases, obtain a payment arrangement with lower monthly payments and little or no interest charges and even no additional penalties.
Free consultations with a tax lawyer are offered by Barrett Tax law, a Canadian tax law firm mainly serving self-employed individuals, small business owners and individuals involved with non-profit and charitable organizations across Canada, at 1-877-8-TAX-TAX.
2. If you decide to do this yourself without the assistance of a tax lawyer or other tax professional, then you should contact the Canada Revenue Agency to show your intent to pay the outstanding tax debt and attempt to make a payment arrangement with the CRA. Here, the authorized agent will look at your individual case and require details about your income and living expenses in order to gauge whether or not you could indeed pay your tax bill in full. They will need to see that you explored all possible avenues to pay the taxes owed to the Canadian government, such as mortgaging your home or obtaining a bank or personal loan. Only after the CRA is satisfied that you indeed cannot pay your tax bill in full will they consider a tax debt payment plan, which will effectively end any other collections actions the CRA may have been considering, such as freezing your bank account or placing a lien on your home – as long as the taxpayer follows through with the agreement and actually makes the payments to the CRA in a timely manner.The information provided above does not constitute legal advice and should not be relied upon as such, since it has been written with a limited picture of the situation. In order to obtain proper legal advice, a lawyer must be aware of all of the details of your particular case. If in doubt, please obtain the advice of a lawyer. You may be eligible to receive a free telephone consultation with a tax lawyer at Barrett Tax Law. For details, call 1-877-8-TAX-TAX today or click here.