I am afraid to do my income tax returns!!
Many people who I meet have not completed the previous year or in some cases several years worth of income tax returns. They are afraid that Canada Revenue Agency (”CRA”)will “do” something to them if they file, even as drastic as being put in jail.
Avoiding the tax department is probably more serious than trying to work with them. You cannot be put in jail for not filing income tax returns, but CRA will often look at any T4s that have been submitted to them, or review the last tax return filed if you are self-employed and base assessments for years you have not filed returns on that information. This means that sometimes you may be entitled to refunds that could offset a debt with them but they do not know this because they are basing what you owe on a higher income.
You might also not file a tax return because there will be a refund and CRA will take it. Even filing for bankruptcy or a proposal under the Bankruptcy and Insolvency Act will not protect these refunds. CRA has the right of offset or taking them to pay down what you owe.
It is better to get the returns completed and filed and it helps a trustee like myself to discuss your options in better detail and with a better knowledge of how much you owe CRA. If the debt is too big to work out once you have filed the returns call our offices at 310-PLAN to discuss your situation with myself or one of our professionals. Having the right information with you when you discuss your situation will help you make better informed choices.
