Canada Revenue Agency (CRA) Can Seize Your Bank Account

I have had to explain on occasion that Canada Revenue Agency is not like your normal creditors. When you do not pay CRA they are able to freeze your bank accounts and help themselves to any money you have on deposit. Typically a normal creditor has to go to court and get judgements etc. in order to get access to your assets. CRA however has a lot of power to — not only raid your bank account but they can also send demands to your employer and your customers requiring them to pay CRA instead of paying you.

When you are deciding which of your creditors to pay it would be wise to keep CRA’s special powers in mind. If you are an employer making the decision not to send CRA your source deductions, you are making a mistake. Not only are you going to have to pay interest and penalties on the amount that you owe, but you are going to annoy CRA in a big way. CRA looks at source deductions as money you withheld from your employees, so it is not your money.  If you don’t send the source deductions to them it looks like you kept this money for yourself. CRA thinks of this as fraud.

If you are ignoring any requests for payment from CRA you should reconsider. Ignoring CRA will not work for long. CRA has ways to get your attention. Contact them and work out a payment plan, don’t wait until they have frozen your bank account to respond to their requests for payment.

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Painless Financial Training Group Inc. with Debi Peverill

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