Received A CRA Payroll Garnishment Notice?
Getting a CRA payroll garnishment notice can be nerve-racking as the CRA can garnish up to 50% of your earnings. Here is what you can do to get a CRA payroll garnishment lifted. Call Farber Tax if you need help fighting a wage garnishment.
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Receiving a CRA Payroll Garnishment Notice & What You Can Do About It
One of the Canada Revenue Agency’s (CRA) strongest collection powers is wage garnishment. This is a situation where the agency sends a CRA Payroll Garnishment Notice to a third party, such as an employer, who is then required by law to withhold or deduct funds from your pay. They will then be required to send this money to the CRA to pay your tax debt.
As you can assume, this is a serious situation and one that can make life very difficult. Affording your monthly expenses and paying your bills without receiving your full income can certainly be tough and potentially impossible. There’s also the fact that if your employer receives a CRA Payroll Garnishment Notice, this could negatively affect your reputation at work. For instance, if you are responsible for handling money or finances as a part of your job, your employer discovering that you have a tax problem could cause them to question your abilities or integrity.
If you work for an employer and have taxes deducted at the source, the CRA is able to garnish 50% of your pay cheque. However, if you earn subcontractor income or freelance income, the agency is able to garnish 100% of your income by sending a CRA Payroll Garnishment Notice to your clients. If this happens, they will have to send the money to the CRA that they would have used to pay your invoices. This not only means that you won’t be able to get your money, but it also means your clients will become aware of your tax situation.
Dealing with a CRA Payroll Garnishment Notice
When the agency decides to garnish your wages, it will send a copy of the CRA Payroll Garnishment Notice to you as well as your employer or client. However, the agency can garnish your wages without any other formal notice, and your employer does not need to notify you that they have received the order.
If your employer or client receives a CRA Payroll Garnishment Notice, or if you have heard from the CRA that the agency is planning on garnishing your wages, it is in your best interest to handle the situation quickly. However, it is also crucial that you deal with the issue correctly. The CRA can be incredibly difficult to deal with and the agency’s processes are very complex. If you make a mistake, you could wind up further complicating your problem.
The most straightforward way to handle a garnishment situation is to pay your tax bill in full right away. Of course, this may not always be possible. The next option is to arrange for a payment plan with the agency. However, since the CRA has very strong collection powers, it is often hesitant to negotiate. After all, it knows that it can take action to collect the money that is owed to it.
This is why it is crucial to work with an experienced professional who knows how to communicate with the CRA. That’s where Farber Tax Solutions comes in. We have the skill, knowledge, and proven history of success to deal with CRA problems and tax issues. We will review your tax situation, formulate a plan to handle it, and communicate and negotiate with the CRA on your behalf to resolve your tax issue and wage garnishment situation.
Farber Tax Solutions can help you successfully deal with CRA problems. We utilize the experience of our tax experts to:
- 1| Offer a comprehensive solution that is focused on achieving the most favourable possible outcome for your tax issue;
- 2| Communicate with the CRA on your behalf and navigate the entire CRA dispute process; and
- 3| Offer a complete solution to your tax problems, including ex-CRA professionals and tax lawyers from Farber Tax Law.