Are you having problems with Canada Revenue Agency?

A letter from Canada Revenue Agency (CRA) can sometimes turn into a scary, intimidating experience. The fear can escalate to the point where every time you check your mail and another brown envelope from CRA stares back at you, your heart beats fast and you feel as though you are going into cardiac arrest.

CRA only contacts taxpayers by regular mail stating the purpose of their enquiry. Every year CRA spotlights irregularities in income tax returns that they deem need review.  These letters could be for one or more of these items;


  • Financial enquiries such as high amount of expenses not normally reported on tax returns
  • Questionable large amount of medical claims that may not be covered under medical tax credit
  • Late payments or taxes owing from previous years
  • Requesting information on an item filed on your tax return
  • Income splitting irregularities
  • Recurring rental loss on property


  • Late payments for GST/HST, payroll or quarterly tax installment payments
  • Claiming 100{63ada0a2aa43cd12a1e388ce505fcbbabbd7071d6c8a7375abe7ebc142e4282b} for vehicle as business expense
  • Large amount of home office deductions
  • Claiming business loss
  • Reporting a low income amount that does not match with high expenses

Any of these inconsistencies that stand out on CRA radar, know as red flags, require investigation. Only when CRA is fully satisfied with the results of their investigation will the red flags go away. So it is best to respond sooner rather than later to CRA enquiries. Ignoring CRA enquiries may trigger them to up the enforcement to get you to respond. They have the power and authority to take steps that could turn your life into an absolute nightmare.

Freeze bank accounts

CRA will contact your bank by letter indicating the amount of tax owing with the term “Requirement to Pay”. Your bank is required to follow CRA orders to freeze your bank account and “hold” the frozen funds for a period of time before forwarding to CRA. When your bank account is frozen, you are unable to;

  • Pay your bills
  • Conduct business
  • Deposit money or income into your account

Garnishment of wages 

CRA has authorization to garnishee up to 50{63ada0a2aa43cd12a1e388ce505fcbbabbd7071d6c8a7375abe7ebc142e4282b} employment income. For businesses and sub-contractors up to 100{63ada0a2aa43cd12a1e388ce505fcbbabbd7071d6c8a7375abe7ebc142e4282b} can be demanded. Garnishment is not only embarrassing but can cause major financial disruptions and irreparable harm to a business and the owner.

Property Lien

CRA can register a property lien against your home at any time. This will stop you from selling or refinancing your home until the entire amount owing to CRA is completely paid and resolved. If you have an existing mortgage your holders will be notified of the CRA lien on your home which could result in damaging relationships with them.

Worst scenario

CRA has the power and authority to enforcement all of the above actions at the same time; even towards one single tax problem. An example:

If you owe CRA $100,000 they can freeze your bank account, place a lien on your property and impose garnishee on payments, notice to an employer or contact a business owners clients to collect of accounts receivable, all at the same time!

Certified Professional Accountant (CPA) can help you

You don’t have to take on CRA by yourself. A Certified Professional Accountant (CPA) can help you wade through the issues and be an advocate on your behalf. A CPA deals regularly with CRA for numerous reasons and understands the processes and procedures what needs to be followed. They know the right questions to ask to get results. An experienced CPA will decrease your anxiety by providing a quick turnaround to resolve your issues with CRA.

It is never a good idea to ignore CRA enquiries. At Banka & Company our CPA’s have many years of experience helping clients get through CRA tax problems. Contact us today if you are experiencing a tax issue with CRA and need advise what steps need to be taken.

If you have any questions or would like to schedule a complimentary appointment, please contact us at or phone 250-763-4528.


At Banka & Company, CPA we help clients Plan, Manage and Succeed