An Updated Guide to CRA Collections
What follows is a very broad overview of the state of CRA collections in a post-pandemic world. We also have blogs covering more specific collection topics, such as:
- The CRA’s ability to place a lien or sell your property – please see: Can the CRA Take My Home? – Rosen & Associates (rosentaxlaw.com)
- The CRA’s legal collections powers – please see: The Power and Limits of CRA Collections (rosentaxlaw.com)
- A statute of limitations on CRA collections action – please see: What is the Statute of Limitations on CRA Debt? (rosentaxlaw.com)
Lenience during the COVID-19 pandemic:
Amidst the chaos and uncertainty of the COVID-19 pandemic, the CRA suspended collections on new debts and extended leniency towards pre-existing payment arrangements. This allowed many taxpayers extra comfort during an otherwise stressful and financially difficult time. Though COVID-19 still affects many taxpayers to this day, the CRA no longer considers it to be a sufficient factor to limit their collections actions.
An increase in pressure
Coming out of the pandemic in the recent two years, the CRA announced that they were resuming collections efforts “in full” as opposed to the lenient and flexible approach. In recent months (and particularly at the start of 2024), the CRA has further ramped up its collections efforts, and are being extremely strict with repayment.
Assigned Collections Officer versus Unassigned
Unassigned
If your account is unassigned, meaning that no specific collections officer is assigned, your main contact point would be the CRA General Collections line. You can negotiate payment plans with this line, and in the same vein, General Collections can threaten legal action as well.
It is quite rare for legal action to be taken when there is no officer assigned to a file, but it is not impossible, and it is very important to recognize that the absence of an officer does not completely protect a taxpayer from collections actions.
You may also call General Collections to inquire whether an officer has been assigned to your file, and if one has, you can request there contact information, or that they contact you or your authorized representative.
Assigned
Once you do have contact with your Collections Officer, whether it be by getting the information from a phone call or their signature on a collections letter mailed to you, most of your collections matter will be handled directly by them.
An assigned officer has its pros and cons. First, as opposed to General Collections when your account is unassigned, collections officers will be more willing to contact you or your representative and will likely apply more pressure with regards to taking legal action if payments aren’t made. On the other hand, maintaining a relationship with the same collections officer can often allow for more creative solutions to paying off debt beyond standard payment plans. These can include:
- “uneven” payment plans based on unstable earning patterns;
- Lower payment plans based on financial disclosure showing a lower ability to pay; and/or
- Short- and long-term abeyances on collections actions for various personal or business reasons.
While these options are not impossible to obtain without a collections officer assigned, the continued relationship can afford some more trust towards the taxpayer.
The most important thing to remember with collections is to maintain contact. Even if you have not paid an amount or have nothing further to provide them with, simply avoiding their calls will often lead to them commencing legal action.
While the process can be unsettling, you are allowed to have a representative handle these matters on your behalf. Please seek the help of a tax professional for this type of assistance.
**Disclaimer: This article provides information of a general nature only. It does not provide legal advice nor can it or should it be relied upon. All tax situations are specific to their facts and will differ from the situations in this article. If you have specific legal questions you should consult a lawyer.