Secured Payment Plan To Payoff Tax Debt

Case Background:

Ms. L is a semi-retired teacher in the greater Toronto area.  She had an amount owing to the Canada Revenue Agency (CRA) of roughly $35,000 as a result of non-filing for a number of years.

She had been in discussions with the CRA regarding her outstanding balance but was having no success in negotiating a payment arrangement.  She contacted Farber Tax Law after the CRA registered a lien on her home and had placed a garnishment of 25% on her Public Service Pension.

The Farber Tax Law Approach:

A payment arrangement was required.  After an extensive review of her income and expenses, assets and liabilities we approached the collection officer on the file by way of submitting financial disclosure and proposing a reasonable payment arrangement. 

The collection officer did not accept the arrangement and refused to remove the garnishment from the client’s pension.  This, of course, put the client in a precarious financial position and resulted in her falling behind in various obligatory payments such as condo fees and mortgage payments which put her in the possible position of losing her home.

Having had no success with the collection officer, Farber Tax Law escalated the situation to her immediate supervisor.  This too proved fruitless.  

At this point, Farber Tax Law composed a definitive letter to the Assistant Director of the Tax Services Office in question outlining the specifics of the situation, our dissatisfaction with the treatment of the taxpayer by the CRA and the ways in which the CRA had fallen short of their obligations according to the Tax Payer Bill of Rights, their own Collections Policies and Procedures and Supreme Court Case law.

For reasons unknown, the Assistant Director failed to respond to this letter.  With the CRA collector and her supervisor adopting an intractable posture, and having no response from the Assistant Director, Farber Tax Law made overtures to the Director of the Tax Services office, again stating the case and making a reasonable payment proposal.

The Result:

As a result of our understanding of the structure and mechanisms of the CRA and in bringing upward pressure to bear on the situation, we were ultimately successful in having the CRA agree to two lump sum payments facilitated by the client’s refinancing of her home and a payment arrangement over the course of approximately 32 months which the client could afford.