A Guide to Dealing with a CRA Frozen Bank Account
In Canada, the self-employed individuals who do not pay taxes in a timely manner are subjected to the legal notice letters from the CRA. A failure to reply to such notices translates into the seizure of the assets of the concerned individual.
At first, the CRA freezes the bank account of an individual to draw their attention to the non-payment of taxes. Usually, this happens when a potential taxpayer ignores the pay notices sent by the CRA repeatedly. It can also happen in the event of not filing the taxes for more than 12 months. In instances such as these, the tax officials get the impression that an individual is being non-cooperative in a deliberate manner.
What to do when the CRA freezes your bank account
The wise thing to do following the seizure of the bank account of an individual is to look for professional help. Professional tax consultants can help an individual get out of situations like this. However, it is necessary to get in touch with a professional as soon as possible – the quicker, the better.
It is also recommended that you should open another bank account to prevent the total stagnation of funds. Unless the CRA gets to know about this account, it will not notify the bank.
It is a good idea to establish communication with the CRA to find out the reason behind the frozen bank account. Next, it is necessary to work with the CRA for the release of the funds. The tax collection agency in Canada can allow it if the concerned taxpayers agree to pay their tax returns with a given timeframe as instructed by the CRA.
Given the fact that the CRA considers a payment schedule only post the exhaustion of all the options, including borrowing or selling off your assets, it is important to figure out the outstanding dues so you are able to decide what amount of money you are able to pay.
While the amount of money which the CRA necessitates to pay can be difficult to bear for a taxpayer, not having an agreement would only serve to attract further legal actions or penalties.
Has the CRA frozen your bank account? If yes, then prompt action can save you both money and hassle. Contact us now for help or assistance regarding CRA tax remediation and appeals in North York, Ontario and other parts in Canada.