Tue. Oct 27th, 2020

Financial Planner

Tips, tricks and guidline for financial planner

How To Deal With Back Taxes

It doesn’t matter whether you are a business or an individual, at one point or another you may encounter tax problems. Some common tax problems in Canada include, but are not limited to, tax evasion, back taxes, late filing of taxes, among other issues. The bigger issue is what happens when you are in trouble with the Canadian Revenue Agency (CRA)?

The CRA is Canada’s tax administration agency tasked with collecting taxes from Canadian residents and business; in addition, the CRA is responsible for enforcing tax laws and applying penalties as needed. Getting back to the question at hand, what happens when you encounter tax trouble? First, you need take a deep breath and relax. Then, you should carefully read your tax notice. After that, you contact a tax firm as soon as possible for assistance. A tax firm is a business staffed with tax attorneys and certified tax professionals who are trained in dealing with tax problems. The most important task the firm can do for you is to help you understand your tax situation and advise you on what actions you need to take. They can also negotiate an effective payment plan with the CRA that will get your tax debt paid off in a timely and affordable manner.

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The CRA places hard penalties on back taxes. The CRA’s main concern is to collect the debt you owe to the government, and the CRA will impose any administrative penalties necessary, such as wage garnishments, bank account levies, and more. A court order is not even needed for many of the CRA’s administrative penalties.

Can you go to jail for back taxes? Absolutely.It is even possible to go to jail for owing back taxes; though it is unlikely in many cases. Many people who do go to jail for back taxes end up in prison because they were found purposefully filing fraudulent returns, not reporting income, and going through herculean efforts not to pay taxes. In essence, if your tax case did not involve serious tax evasion, then it’s unlikely you will go to jail. However, that doesn’t mean you should have a cavalier attitude about your own tax situation. The administrative penalties alone are enough to disrupt your life.

In the end, the smart thing for you to do is to work with a tax firm, such as Tax911 Now! (head over to Tax911now.ca/tax-preparation-service/ for more info), to resolve your issue. Of course, you can try to resolve your tax woes on your own, but dealing with the CRA alone can be stressful. It would be in your best interest to work with a professional who knows how to navigate the CRA. Let’s face it, the CRA works tirelessly to collect the debt you owe to the Canadian government and their primary goal is to collect taxes from individuals and businesses on behalf of the government. If you are facing tax difficulties, make the smart choice and get professional help.