Income Tax Debt

Personal Income Tax Debt

Many people find themselves in situations where they are not able to pay their income tax debt owing to the Canada Revenue Agency (“CRA”). CRA debt may result from the following:

  • a re-assessment of a prior year personal income tax return,
  • a self-employed personal who has underreported their income,
  • situations in which the CRA has disallowed self employed expenses being claimed,
  • the inability to make the required income tax installments,
  • an unsuccessful tax appeal resulting in a larger tax debt than anticipated, and
  • the inability to pay tax arrears as a result of an unexpected financial problem.


We have helped many people settle their Canada Revenue Agency debt through the filing of a Proposal and it is worth it to contact our office to discuss further. We have dealt with many situations for individuals and corporations involving unsuccessful tax appeals, taxpayer relief applications and re-assessments by the CRA for tax shelters.

The Process

The filing of a Proposal, can only be filed through a Licensed Insolvency Trustee.

A Trustee is an independent officer of the Court and as such, the representatives at CRA can review the Proposal materials being presented to them with the confidence they need to make the right decisions.

In the Proposal process, the Trustee will assist you to prepare a tax settlement offer (Proposal) and a household budget which will be sent to the Canada Revenue Agency.  Typically, Proposal settlement offers include a monthly fixed payment for a period of five years.  The amount of the payment will depend upon your monthly household budget, so the Trustee will assist you with the preparation of a budget to ensure that you can afford the monthly payment that is being offered.

Once the Proposal is filed CRA cannot take steps to garnish your bank account or commence any legal action.  On filing of the Proposal, a representative from CRA will contact the Trustee to discuss the offer and the advantages of accepting the offer when compared to a bankruptcy.  Upon acceptance of the Proposal, you will need to comply with the terms of the Proposal and make your month payments.   Once the terms of your Proposal has been fully performed (i.e. you have made all of the required payments), you will receive a certificate of full performance.

Our professionals are qualified and have been successful in negotiating formal settlements (Proposals) with the Canada Revenue Agency for many years. Call us now to speak with a licensed professional to explore your options at 416-504-1650 or toll-free at 1-855-654-1650 or visit one of our locations.

CRA Collections Officers

If you are in arrears with CRA, chances are that a collections officer from CRA will call you to collect what you owe.  You should be aware that once you file a Proposal with CRA, your file with CRA will be transferred to another collections officer in the “insolvency and collections division” at CRA, so a new collections officer (who specializes in Proposals) will be assigned to your file.

The professionals at Albert Gelman Inc. have experience in communicating with CRA’s insolvency and collections representatives.

Corporate Director Liabilities

Have you been assessed by the Canada Revenue Agency or the Ministry of Finance for liabilities resulting from unpaid GST/ HST, payroll source deductions or PST? Has a government agency garnished funds from your personal bank account?

According to the Income Tax Act, directors of corporations are liable to the Canada Revenue Agency for unpaid GST, HST and payroll source deductions. Directors are also liable to the Ministry of Finance for unpaid PST.

When you find yourself in this situation, the filing of a Proposal under the Bankruptcy and Insolvency Act can stop the garnishment of funds from your bank account and allow you the opportunity to consider making an offer to settle your tax debts at less than the amount due and relieve the stress and pressure from collection calls.

We have experience dealing with government agencies and have successfully negotiated Proposals between Corporate Directors and government agencies for years. Call us now to speak with a licenced professional to explore your options at 416-504-1650 or toll-free at 1-855-1650 or visit one of our locations.

Call or email us today!

The professionals at Albert Gelman Inc. have assisted many individuals in southern Ontario to resolve their income tax debts.  If you live in Southern Ontario call us today at 1-855-654-1650 or review our locations page, to find a location that works for you.

Related Blogs:

CRA Froze and/or Garnished Your Bank Account? Options?

Does a Proposal Filing Affect a Tax Debtor’s rights to object, appeal or request relief?

Did the CRA asses the Director of a Bankrupt Company in Time?

Income Tax Act section 160 – Tax Liability Associated with Transfers to Related Parties

Advice for Accountants and Lawyers with Clients Facing Insolvency

Tax Evasion: A CRA Focus

Are you a self-employed? Are you behind on paying your income taxes or HST?

Should I file a Consumer Proposal?

The Proliferation of the Consumer Proposal