Helping People Who Have Income Tax Debt

Accountants are often the first to know that their clients are about to have a major financial problem. If you work in the accounting profession then you know that many, many Canadians struggle with income tax debt in Canada.

Once a tax return is filed late or re-assessed resulting in an amount owing, the Canada Revenue Agency will add penalties and interest retroactively on this tax debt which may cause it to double and even triple in size.

When a large income tax debt is owed to the Canada Revenue Agency it can be paralyzing. The Canada Revenue Agency will demand to be paid in full and has incredible authority and resources to collect the income tax debt owed.

Many people feel so overwhelmed when they have a tax debt that they simply ignore it because facing it is too stressful; but this is the worst thing to do because the Canada Revenue Agency will catch up eventually and the consequences will be catastrophic.

If the taxpayer does not have the liquidity to pay off his or her tax debt, then he or she needs to get financial help immediately, beginning with working with a debt consultant to weigh his or her financial options. Income tax debt is like any other debt. There are Federal Government Programs in place to provide Canadians with a legal avenue to deal with their debt. These avenues in many cases do not involve bankruptcy and can stop Canada Revenue Agency collection action.

If you have a client who is struggling with an income tax debt or if you would like to host a WeCare Day to provide education to your clients about how they can deal with tax debt once their returns have been filed, please contact me by emailing kgoldenberg@debtcare.ca, call me at 416-907-2582 ext 2587 or visit www.debtcareservices.ca.

About admin

Karen Goldenberg is the Director of Community Outreach at DebtCare.