In 2020 the CRA suspended that particular debt collection practice, in recognition of the difficult financial circumstances faced by many taxpayers during the pandemic. In a recent Tax Tip, however, the Agency confirmed that where a taxpayer owes money to the federal government, his or her tax refund for the 2022 tax year (as well as most other amounts owed to the taxpayer by the Agency) may be reduced by the amount of such debts.
Where the Canada Revenue Agency (CRA) owes an amount to the taxpayer (such as a tax refund), the Agency has the right to deduct from that amount any debts owed by the taxpayer to the federal government (including debts related to pandemic benefits). Taking such offsetting deductions was in previous years part of the Agency’s debt collection processes.
Details of the CRA’s debt collection policies, including some limited exceptions, are outlined in the Tax Tip, which is available on the CRA website at https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2023/cra-would-like-remind-you-it-has-resumed-debt-recovery-activities.html.
If you would like help with dealing with the CRA or would like someone to file your personal taxes, please feel free to call us at (905) 305-9722 or email us at info@eigenmachtcrackower.com and we will help you out!
