Back Taxes

CRA is not a proponent of individuals not filing tax returns. This is not recommended procedure. If you don’t file your tax return, CRA does not know what your tax payable is. So CRA will estimate / provide a notional assessment for back taxes owed. This estimate can be based on tax slips the CRA has or based on prior years’ tax returns.

What can the tax department do if you don’t file your tax returns? One of the weapons in their arsenal is garnishing wages. If the Canada Revenue Agency (CRA) has sent you letters requesting that you file your tax returns, and you have ignored the requests to file the tax returns; you may find that your pay cheque is less that what it usually is. Most of the cases that we have seen, CRA has garnished wages from 20% to 50%. This is substantial and can dramatically affect your standard of living.