DioGuardi: Rate your Tax Problem –Payment demands to your clients

DioGuardi: Rate your Tax Problem –Payment demands to your clients - 4.2 out of 5 based on 582 votes

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DioGuardi Tax Problem

 

 

When a small business has been running a large tax balance for several years, the Taxman can suddenly get tired of waiting to be paid. Without warning he will send letters to – or even worse, visit – your principal clients to serve them with Third Party Requirement to Pay letters. This is a legally binding demand that any monies due to be paid to you must be paid directly to the tax authority – federal or provincial. If your clients defy the order and continue to pay you, they may be held liable for your unpaid tax balances.

 

How does the Taxman know the names of your clients? We see a pattern in which the CRA demands to see your books and records for a “trust audit”. The Auditor visits your premises to check that you are reporting and filing accurate source deductions, or GST or PST remittances. But at the same time he is reviewing your invoices, he is gathering the names and addresses of your clients. Then, when he determines you’re not likely to be able to pay off your tax bill in full within the next 12 to 24 months, he goes straight to your clients to collect the tax. The move is calculated to choke the life out of your business and force you into bankruptcy so that the CRA agent can close file and collect his next promotion or salary increase. 

 

Before you panic and fall into the bankruptcy trap, talk to DioGuardi. We can demand an injunction in the courts for a stay of collection action to permit you the time to  organize your finances to address the tax debt. If you have a legitimate case, we can also seek cancellation of penalties and interest through submission of an application for Taxpayer Relief. This protects your legal right to due process, as set out under Section 220 of the Income Tax Act.

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