Monday, July 9, 2012

Can You Stop a Canada Revenue Agency Wage Garnishment?

Many people think that the Canada Revenue Agency only imposes wage garnishments when collecting a tax debt that has been assessed when in fact the Canada Revenue Agency will also impose wage garnishments on people who they think will owe them money.

Wage garnishments are one tool in the Canada Revenue Agency arsenal that they can use to collect tax revenue that they believe they are owed. The Canada Revenue Agency can garnish up to 50% of employment income and up to 100% of other income like pension income for example.

When a taxpayer has a tax debt and does not have a voluntary payment plan in place, if the Canada Revenue Agency knows where the taxpayer works they will often impose a wage garnishment. If a taxpayer is behind filing tax returns and the CRA believes that a tax debt will be owed they will impose a wage garnishment until the taxpayer voluntarily files their returns and proves that there won't be a tax debt or files their returns and pays any tax debt owed in full.

Once a wage garnishment has been imposed it is very difficult for a taxpayer to get it removed on their own. It is a dangerous prospect for a taxpayer to contact the CRA directly because when trying to negotiate the removal of a wage garnishment, the CRA will use the contact as an opportunity to find out even more information about the taxpayer like where they bank or if they own their home. Just because the CRA has placed a wage garnishment doesn't mean that they can't pursue other enforcement action at the same time. If they believe you owe them money they will do whatever it takes to collect it. This could include garnishing your wages and then also freezing your bank account for example.

The difficulty is a CRA wage garnishment can cause financial devastation. Individuals have a basic right to be able to have a roof over their head, food, transportation etc

Can you stop a Canada Revenue Agency wage garnishment? The CRA does remove wage garnishments but generally they won't do it without compelling evidence that the wage garnishment is causing severe financial hardship and evidence that the taxpayer can and will honour a voluntary payment plan that is satisfactory to them.

The most effective way to get a garnishment removed from your wages is to hire an organization that specializes in dealing with these types of tax problems to negotiate with the Canada Revenue Agency on your behalf. By injecting a skilled third party into the negotiation who is familiar with CRA practices, policies and procedures they will be likely to:

1. Gain a better perspective on the CRAs option and position on the taxpayer.

2. Work with you to present a voluntary payment plan that will be accepted by the CRA.

3. Build a case of compelling information, facts and supporting documentation that is relevant and is likely to be accepted by the CRA.

4. Obtain a written commitment from the CRA with respect and expedite the removal of the wage garnishment.

At the end of the day the only way to get a garnishment removed from your wages is to get the CRA to agree to do it and it can be done.

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