Can you negotiate with the CRA?

Some say yes, some say no. You owe a large amount of taxes and you are unable to pay it. It is a debt that will not go away, ever, so it is best to deal with it. One way to address it is to propose a payment plan to pay it in instalments.

The CRA wants their money and if they haven’t contacted you yet, it is a ticking time bomb ready to explode - rest assured that they will not forget about you. Once they do, you can only hide for so long, unanswered calls and notices will eventually lead to collections actions, such as freezing of bank accounts, garnishing your wages and placing a lien on your properties, among others.

What can you do if you are in a dire financial situation where you just can’t pay the owing amount? Enter the Tax Mechanic – or someone as qualified and confident dealing with the CRA as us. It is a matter of finding the right approach, the right perspective to every situation, the skills to negotiate with the most difficult entity to negotiate with, and a bit of luck of course, because sometimes landing the right agent will significantly facilitate – or slow down - the process.

Let’s just say for a moment that the CRA, just like predators, smells fear, and that will make it more aggressive, more relentless. Just like with predators, if you’re the prey, you can rarely escape, and running will make it worse. So you just got to look it in their eyes and hold their gaze. The predator’s that is. Ok, except if it’s a bear. Bottom line is, after years of dealing with the CRA, eventually one learns their ways and the little subtleties and wordings that will soften them up, and meet their hidden compassion. We do that, all the time.

While they might not agree to reducing your taxes - except in certain situations where a taxpayer qualifies for tax relief - working out a payment arrangement with a monthly payment may be the next best option. The amount depends on your financial situation and ability to pay, among other things. Once we send in a payment proposal along with supporting documentation, it is their discretion to agree to it or not – and often our secret negotiating skills come into play in achieving the desired outcomes.

To determine the monthly amount to pay, the government of Canada has a payment arrangement calculator on their website for taxpayers’ convenience: https://www.canada.ca/en/revenue-agency/services/about-canada-revenue-agency-cra/when-you-money-collections-cra/calculator-disclaimer.html

The amount you can pay monthly will obviously depend on your income and expenses, and we will help our clients through the process of finding a balance that works for them and that the CRA is likely to consider.  

There is a solution to everything, including a tax debt and this may be the one for you. Let’s talk!

Written by: Christa Lazar