There are so many types of tax problems that Canadians experience that find them in situations where they are going to have to initiate a conversation with the Canada Revenue Agency. These types of problems can include:

• Past due tax returns

• Notional assessments - this is where a taxpayer is past due filing his or her tax return so the CRA files the return on their behalf

• Re-assessments of tax returns

• Tax audits

• Tax debts

• Enforcement action like wage garnishments, frozen bank accounts, property liens and more…

If you have found yourself wondering how to negotiate with the Canada Revenue Agency you should read this before you initiate contact.

The agents of the Canada Revenue Agency have been pursuing taxpayers since their existence. Their agents are trained and tricky and contacting them unprepared can place you in a very vulnerable situation. The more information you give them, the more ammunition they have to use against you so it is advisable when dealing with a tax problem to hire a representative that is skilled in CRA negotiation so that you don't make your problem worse.

CRA agents are gatherers. Each time you initiate contact they are trained to gather more and more information from you, preparing to be ready in the event they need to collect money from you. Not all CRA agents will be unfriendly or seem threatening.

One example of a common tactic that the CRA will deploy is allowing you to make an interim payment plan with them "if" you provide them with disclosure including where you work, or where you bank, or information about assets you have like asking you if you own or rent your home. Usually these payment plans will be 3 or 6 months in length and when they are finished they will demand payment in full. When you can't pay in full they will then proceed to use information about where you work to garnish your wages, or information about where you bank to freeze your bank account, or information about whether or not you own your home to place a lien on your home.

Another common tactic that the CRA will deploy is to lead you to believe that they may accept a payment plan from you if you substantiate the amount you can pay monthly by making financial disclosure to them. This financial disclosure will include all that we mentioned above and more. Then once you have made disclosure they will disallow many of the expenses you have and demand that you make a monthly payment to them far greater than what you can afford to pay while honouring other financial obligations. For example, the CRA will not consider payments to loans and credit cards when assessing your ability to pay them. You may provide them with information about your income and expenses, showing them that you can pay them $500 per/mo. for example. Once they have all of your financial information they will deduct all the money you pay to loans and credit cards and demand a far greater monthly payment than you can afford without defaulting on payments to other creditors. When you cannot pay they will proceed to use the information provided in your financial disclosure to pursue enforcement action to collect the money from you.

Each time you directly contact the CRA in an effort to negotiate, you risk further exposing yourself to further problems because you enable them with each contact to extract more information from you. Just like how agents of The Canada Revenue Agency are skilled and trained to get the information that they need to force you to do what they want you to do, organizations that specialize in representing people with tax problems understand their policy and procedure and know how to negotiate with the Canada Revenue Agency effectively. CRA agents are paid by the government to collect tax revenue and they will do whatever it takes to collect it.