Cooper & Co. Explains How Trustees Can Help You Fight the CRA

October 26, 2016 - For many customers, the Canada Revenue Agency (CRA) is a dark force of the government. In other words, the CRA is something to be feared as an all-powerful body that is hard to fight if they come for you. However, in an interesting blog, leading insolvency trustee firm, Cooper & Co., explains what exact powers the CRA has and why you may not have to fear them.

The company has continued its recent output of explaining how customers can overcome the burdens of bankruptcy and how to deal with the Revenue Agency. In its latest piece, titled "You can't fight City Hall," in which Cooper & Co. says:

"What exactly ARE the powers CRA has? And if you have a tax problem (personal income tax arrears, HST owing, directors' liability owing for a corporation…), can you do anything about it?"

In the blog, the company points out that it is actually possible to fight (fairly, of course) the power of the Canada Revenue Agency. However, Cooper & Co. points out that how successful you are will depend on what collection action has already been started by the CRA.

It is important for borrowers to know exactly what the CRA can do. For example, it is within the agency's power to take wages for monies owed. Typically this is around the 20-30% mark for each pay period, but it could be more. Indeed, Cooper & Co. explains that the CRA can actually take 100% of wages if it believes there is another means of income. Disruption of finances also includes the ability to seize bank accounts and the funds within them.

One thing Canadians fear the most about the CRA is the ability to seize assets and possessions. Cooper & Co. talks about how this can affect home ownership.

"They can lien your house or even your name. A lien is essentially like a mortgage – it just sits there until eventually your house sells (either voluntarily or by power of sale) and when the proceeds of the sale are distributed, the lien(s) gets paid right after any mortgages. So if there is equity in the house, it is reduced by the lien amount. AND penalties and interest continue to accumulate on the tax owing while the lien is in place."

What's particularly worrisome if you owe money is that the CRA has all these abilities without needing to acquire a court order. This makes the agency particularly hard to fight and is a reason why many Canadians believe contact with the CRA is an end game. However, Cooper & Co. says taking a positive approach to paying back debts can often help.

For example, simply contacting the CRA and being proactive can help. The agency is in no way obligated to accept a reduced payment or give more time, but it certainly can't hurt to try. Contact is definitely better than avoiding the issue entirely until the CRA takes more definitive action(s). The blog states that this tactic may work, but in reality the most likely scenario is that you get more time, but not a reduced payment amount.

Other methods are either too expansive, illegal, or pointless. A tax lawyer may be able to help you, but they can be quite expensive and will simply add to your financial burden in the short term. Fleeing the country or avoiding the CRA is a more nefarious option, but one not worth taking.

"You can flee the country (not recommended!), but if you even return and CRA locates you, they can resume collection activities and all penalties and interest will have accumulated in the meantime during your absence."

If you find yourself at this junction, it may seem that all is lost. That is certainly not the case as speaking to a Licensed Insolvency Trustee can help you find the best outcome. Trustees are often associated with insolvency, but they are actually obliged by law to show you all options before you get to the stage of filing insolvency.

Cooper & Co. explains that it sits down with clients and reviews their entire financial record to find the best option, whether than includes the Bankruptcy and Insolvency Act (BIA) or not. The company explains how it has the power to deal with the CRA and get the best results for customers. It seems Cooper & Co. really can fight city hall.

"A Trustee's powers are unique when it comes to CRA debt: we can stop all existing garnishees that are in place via a stay provision within the BIA. We can even retrieve certain amounts that have recently been garnisheed. We can unfreeze seized bank accounts. Basically the BIA legislation allows that all unsecured creditors must cease all collection activity on the person filing as a means of allowing that individual to be able to function again. The bankruptcy law (which also governs consumer proposals or Division 1 proposals, a.k.a. "consolidations") is not meant to be punitive, it is meant to be rehabilitative in nature. In other words, "an honest but unfortunate debtor" should have a chance to have his unsecured debts discharged and be financially rehabilitated. And that is what a Trustee also does: builds for you an affordable budget in which you can get through bankruptcy OR complete a modest proposal (monthly payments, etc.) in which your debts are eliminated."

About Cooper & Co. Ltd
Cooper & Co. Ltd is a Licensed Insolvency Bankruptcy Trustee firm. The company has been in the debt relief industry for over three decades. Over that time, Cooper & Co. has helped over 15,000 clients to escape from debt and understand how to maintain a healthy financial state.

Cooper & Co. Ltd.
1120 Finch Avenue West
Suite 108
Toronto, Ontario
M3J 3H7
Canada
(416) 665-3383