Having unfiled tax returns is one of the most common tax problems that leave people owing money to the CRA (Canada Revenue Agency). The number of taxpayers that accumulate past-due tax returns is surprisingly high and continues to increase. As the CRA cracks down to try and reduce the tax gap, we can all expect to see the number of taxpayers owing back taxes grow.
The CRA takes a severe view of unfiled income tax returns, and sees this as a pattern of behavior that can be construed as criminal. The CRA does not have to negotiate with you, no matter how dire your circumstances, until you are in compliance. To be in compliance, you must have all your back taxes filed and be in the process of paying your current year tax bill. This means you can expect to see no relief from CRA collections actions such as wage levy, and no consideration for tax debt relief of any sort, until your returns are filed and you are paying your current tax bill.
File Your Unfiled Tax Returns
The most important thing you can do to stay out of trouble with the CRA is to file your tax returns every year on time. And if you haven't filed a tax return from any year over the past seven years, you can minimize penalties and interest by filing those unfiled returns sooner rather than later.
Intentionally not filing your tax return is a federal crime. However, the CRA understands that mistakes happen and they give you a limited opportunity to file past due tax returns and even to amend a tax return if you need to.
CRA Notifies Your Unfiled Taxes
The CRA may send you a notice requesting that you send in an unfiled tax return late in the same year it was due. They may also wait several years to notify you that they have not received your return from a given year. By and large, the thing to recognize is that the CRA will eventually notice that you haven't filed a return and they will pursue you for the tax penalties and interests.
Consequences of Not Filing Past-Due Returns
If you fail to file a tax return, the CRA has the ability to paralyze you financially. They can keep you from obtaining student loans, buying a house, refinancing a house, or getting credit from most lenders and credit card companies until you pay all delinquent taxes.
The CRA can also seize available cash from your bank accounts and any other benefits, such as Employment Insurance Benefits, often when you can least afford to lose the income.
When a Mistake Becomes a Crime
Over the last several years, the CRA has improved its database of income transactions and increased its ability to identify people who have not filed taxes. If you have unfiled returns, you rise to the top of the list of people the CRA wants to target to collect revenue. If you can file before the CRA gets to you, you have a better chance of resolving your tax problems relatively painlessly.
But if you wait for the CRA to find you, the cost of additional tax penalties grows exponentially. And if the CRA seeks you out before you have filed past-due returns, the likelihood of punishment escalates. Convictions for tax evasion, including not filing tax returns and making false declarations, can result in court imposed fines, plus jail time.
The CRA has a wide range of punishment available that they can impose on persons who don't file returns. Intentionally not filing, or filing a false return, is a crime. Taxpayers have to pay the taxes owed and all other civil penalties and interest imposed by the CRA. Our unwavering advice is to act to resolve your unfiled return before a simple mistake becomes a crime.
Most Common Excuse for Unfiled Tax Returns-I Can't Pay what I Owe
Many people worry so much about not being able to pay the CRA that they don't file. This is a mistake the CRA will make you pay for dearly. Don't let worry about owing the CRA money keep you from filing your tax returns. If you are not able to pay your taxes, the CRA offers payment options or even waive some of your tax debt by approving your application for Taxpayer Relief.
It is important that you try to promptly deal with filing past-due tax returns, getting tax representation, negotiating your tax debt and payment option, setting up payment plans, and settling tax debt. The weight you feel can be gone if you just ask for help. We can take care of your unfiled tax returns and you can avoid the mess that's heading your way. We're here when you need us.
The CRA takes a harsh view of unfiled returns, and sees them as a pattern of behavior that can be construed at worst as criminal. At a minimum the CRA does not have to negotiate with you, no matter how dire your circumstances, until you are in compliance. So the sooner you file all your back taxes and pay your current year tax bill, the sooner the CRA will be willing to negotiate with you.
So call Tax 911 NOW for help so that you can get back on track again on your financial life. 416-840
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Latest CRA Tax News
CRA's Hefty Late Filing Penalties
First time late filing penalty: if you owe tax and do not file your return on time, CRA will charge you a late-filing penalty. The penalty is 5% of your tax balance owing, plus 1% of your balance owing for each full month that your return is late, to a maximum of 12 months. In another word, if you have late tax unfiled, for the very first year, you will have 17% of tax owing for the penalties alone.
Repeating late filing penalty: if the late filing is a re-occurring event within three years, then the penalties become nearly tripled. The late-filing penalty becomes 10% of your tax balance owing, plus 2% of your tax balance owing for each full month that your return is late, to a maximum of 20 months. That is a late filing penalty of 50% of your tax owing.
The Compounded Daily Interests
In addition to the late filing penalties, CRA charges much higher interest than banks on your tax balance and penalties. The interest is compounded DAILY. Use rule of thumb, if assumed interest is 7%, which is not abnormal for CRA for many years, then tax owing doubles in about ten years. When the interest is compounded daily, the interest keeps running when you sleep.
What You Need to Do Now is to stop procrasnating, start taking actions. You can not afford to wait any longer!
What We Can Do to Help You
To control your damage right away, we will do a quick, sometimes, on the spot assessment, if you have unfiled taxes for years and you do not owe taxes. Then we will quickly help you to reconstruct all the financial information and locate all your missing pieces of tax information to report your tax returns properly.
If we determine that you have unfiled back taxes and large tax debts owing for many years and thus the interests and late filing penalties are alarmingly high. Then we may need to help you to file under the Voluntary Disclosure Program or Tax Amnesty immediately to avoid the risk of being caught by CRA and thus lose the opportunity to file under the protective Voluntary Disclosure Program to reduce the severe damage. The penalties alone may force you into bankruptcy.
Why You Should Work with Tax 911 Now
Unlike these accountants or the tax filers with seasonal appearance in the malls, we can not only fix your back tax problem, we can also help you to negotiate with CRA for the matters before and after the filing.
Before the filing, we can help you to file Tax Amnesty program to completely remove your penalties and/or some of the interests.
After the tax filing, if CRA challenge you or audit you, we have the expertise to represent you and fight for you on the returns;
If the tax bill is too high, then we can negotiate a tax relief for you to reduce the tax penalties and interest, or we can help you to negotiate an affordable payment plan so no legal collection actions will be taken against you by CRA.
We are different because we can provide much more comprehensive services to protect you in many aspects and all stages of your tax dealing with CRA.
Our Unlimited Free Consultation & Service Guarantee
To begin with, we offer RISK FREE no obligation initial consultation just to help you to understand the depth and complexity of your tax problems. We will also provide you the recommended steps to take to fix your tax problems. Then it is completely up to you to decide what to do from there.
If you do decide to engage us to fix your tax problems, we will provide price match guarantee within the entire tax negotiation industry.
Get Tax Help TODAY by calling Tax 911 Now team at 877-918-2991 or go to Contact page.
The following is an article by the Toronto Star Published on Thu May 24 2012
Filing taxes late: There s a high cost
Thousands of Canadians file their taxes late. Be prepared to pay hefty penalties and to lose some government benefits if you do.
Millions of Canadians filed their tax returns before the April 30th deadline, but there are thousands that end up filing late, or not filing at all.
If you do not owe money, there is no late filing penalty. You will still be able to file later and still receive your tax refund. However, if you owe money and file late for whatever reason, you will end up triggering penalty fees, face interest payments and become ineligible for certain government benefits.
Here are few things to know if youíve filed your taxes late:
Interest and penalties
There are two different kinds of penalties levied by the the Canada Revenue Agency (CRA).
There are late filing penalties when you owe taxes and donít file your return on time. The penalty is 5 per cent of the amount owed, plus an additional 1 per cent of the balance owing for each month that your return is late - to a maximum of 12 months.
For example, if you owe $2,500 and file six months late, you will be charged 11 per cent - or $275.
On top of the late filing penalty, you will also be charged interest on any amount owed. Interest is compounded daily, and interest rates can change every 3 months.
If you filed a late return this year, and you were also charged a late-filing penalty in one of the previous three years, your late-filing penalties will double. The CRA will charge a penalty of 10 per cent of the taxes you owe, plus an additional two per cent for each full month that your return is late, up to a maximum of 20 months.
News Source: theStar.com