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What if you don’t have the money to pay your taxes? Or, what if you were handling a business crisis and are unable to file your taxes? For one thing, it is not the end of the world. But, on the other hand, the Canadian Revenue Agency (CRA) will start proceedings against your business.
Put every other business management issue aside and make this a priority because if you don’t tackle this tax issue, CRA will create a lot of difficulties for your business.
CRA Contacts You
CRA will take the initiative and contact you. They usually do this by sending you letters asking for the taxes. Further on, CRA won’t stop even if you fail to answer. They will increase their aggression and from mail, they will move to calling you and later on, even set agents on you.
You Contact CRA
The next step for you is to get in touch with CRA before they become more aggressive. Inform them when you will be able to pay the taxes. If you don’t have sufficient funds to pay the required taxes, then submit a repayment plan. CRA will probably negotiate the time period and payment amount, so expect it. CRA will prefer you pay the taxes within 6 to 12 months. You can choose a payment option from cheques to payments directly from the bank.
Refusing CRA is not an Option
If you didn’t pay your business taxes because you are hoping to get out of it, then you are in deep trouble. Not paying taxes to the CRA is not an option for you.
Tax investigations are a big part of what the CRA does. When they investigate a business, they do it with a fine-comb and ensure that your business is not violating any rules. From income tax to excise tax to assessing for any fudging to checking if your business is paying GST or HST (if your business qualifies for them), CRA is very thorough.
- Take you to Court
CRA can take legal action and take you to court. CRA is known to have a high conviction rate. In an annual report to the Parliament, the CRA states, "The rate of conviction is very high due to case selection. Cases are selected for prosecution based on their expected outcome as there is a high cost to this type of compliance intervention ... In this way, Canadians and Canadian businesses are reassured that the most egregious cases are pursued to the fullest extent."
Your risk not only fines, but jail time too.
The good news is that CRA also settles cases outside court.
- Taking Control of your Asset
CRA has the power to freeze your bank account, take your wages as garnishment and put a lien on your house.
Consultant with an Accountant
Not paying the CRA is not an option, which makes your best option – to pay the CRA. To figure out your options, how to deal with CRA and completely know your business’s tax and financial situation, you should talk to a tax accountant.
CRA even has a public conviction page that lists down all wrongdoers.
At times, the reason may be as simple as filing your taxes incorrectly or worse, like not knowing how much tax you owe. At ATS Accounting, we provide effective tax solutions to organizations that need assistance.