If you cannot repay your tax debt at all one time, we often have to come up with creative solutions to make the CRA collections officer happy with the speed of repayment while making sure you can continue to afford the payments as well. This sometimes means that a variety of repayment methods are in place at one time that meet everybody’s needs.
Sometimes the tax debt is artificially high due to notional assessments and part of our role is coordinating tax filings so that we can negotiate a payment plan on a reduced balance. In some cases the taxpayer is able to make a lump sum payment, or a lump sum followed by monthly cheques. In other circumstances we have to prove that borrowing money is not an option in order to have the entire debt paid over time. We also have to be wary of the tactics that the CRA can impose if an agreement is not met. Therefore, we are in a position of minimizing risks of collection activity, while trying to agree upon a method and timing of repayment that will satisfy the collector enough to not progress with further collection tactics. It is this delicate dance of negotiations that really substantiates the need for an experienced representative to be on your account. Lack of knowledge and experience in this area may cause a taxpayer to not prioritize their actions, resulting in disastrous outcomes.