Tax Debt Settlement with Revenue Canada

There is only one possible method to get Revenue Canada to agree to a tax debt settlement and accept a less than the full amount owing for taxes from you: You must file a consumer proposal. Below we explain the circumstances under which Revenue Canada would accept the settlement; to decide if tax debt settlement is the tax debt solution you should consider, check out if you meet all the conditions first.

Is tax debt settlement a tax debt solution that could work for you?

In a consumer proposal, all creditors are offered the same "deal", and the "deal" must be better than what they would receive if you were to file for bankruptcy.

In order for Revenue Canada to accept a tax debt settlement in form of your consumer proposal, the proposal must contain the following terms:

	All tax returns must be filed and up to date prior to the acceptance of the consumer proposal.
	All tax returns due during the proposal period must be filed when due.
	All taxes owing during the proposal period must be paid as they become due (the consumer proposal will only include taxes owing prior to the proposal date).
	In the event that taxes for prior years are re-assessed and a refund is due, that refund must first be applied to Revenue Canada's outstanding indebtedness.

In certain circumstances, Revenue Canada may require additional terms.

Why will Revenue Canada only make a deal if you file a proposal?

Revenue Canada wants to ensure that all of your assets are disclosed, and that all debts are being treated equally. The only way they can ensure this is by requiring you to file a formal consumer proposal when applying for the settlement.

Filing a proposal is a complicated procedure and law requires that it is administered for the courts by a licensed bankruptcy trustee, on your behalf.

We recommend that you ask a trustee to review your situation before making your decision final. Each of our bankruptcy trustees offer a free initial consultation. The professional you opt for will analyze all the circumstances of your case, advise you about each of your options, and then you can decide if applying for a tax debt settlement with Revenue Canada is the tax debt solution that is in your best interest.