Here’s What Can Happen If You Don’t Pay Your TaxesBrian Jang ON June 22, 2016
Now that summer is here and tax season is nothing more than a distant memory, you are probably breathing a sigh of relief. Gone are the days of enduring meticulous research, filing reports, and paying off tax debt (at least for another year anyway). Yes, you can finally sit back, relax and enjoy the sun, knowing that you’ve paid your fair share.
Like all good Canadians, you file your taxes on time and pay them when they are due, right? After all, your taxes go to fund essential programs and services like health care, childcare, employment insurance, and infrastructure projects – you get the picture.
But what if, this year, you decided to throw caution to the wind and skip out on paying your taxes? Seriously, what’s the worst thing that can happen?
What if I don’t or can’t pay my taxes?
Not paying your taxes is certainly an option, but it is not a smart one. If you refuse (or can’t afford) to pay up, the Canada Revenue Agency will start to send you “friendly reminders” of moneys owing. If that is not incentive enough to get you to open your wallet, it will only be a matter of time before your case gets assigned to a CRA collections officer—and that’s when the gloves come off.
Will the CRA forget about me?
When it comes to collecting their money, the CRA is a pretty persistent group. So, if you think they are going to simply forget about you, you’re in for a bit of a shocker. The CRA can not only seize your assets and freeze your bank accounts, but also garnish your wages and put a lien on your home. And they won’t stop there. The CRA can also seize your personal property to help pay the tab. To add insult to injury, you’ll also have to shell out interest rates during the period of time you’re dodging your taxes.
In instances where your tax liability is too hefty for you to even possibly pay off, you may have to file for bankruptcy. While it is true that taking that route could solve you tax debt woes, it can also hurt your credit score, making it difficult to get loans, and in some cases, even employment.
What if I can’t pay in full?
The best and really the only way to avoid the dreaded CRA collection officers from hunting you down is to pay your taxes. Even if you can’t afford to pay everything up front, you can always contact the CRA and work out a payment plan. Trust us—it’s better than doing nothing at all.
Remember, it is always a good idea to have a professional tax accountant go over your situation to confirm that you know what is owing.
Contact BCJ Group, Chartered Professional Accountants for a free consultation today!
- Why You Should Rethink Your Accounting Strategy
- What Can Happen If You Submit Your Taxes After the Deadline?
- What Are the Tax Deductions for the Self-Employed?
- When Are Your Business Taxes Are Due?
- What You Need to Know About Paying Taxes by Installments