Tax season is here again and CRA deadline for filling 2022 tax returns is May 1, 2023.
The implication of this is that, you have to make efforts to file your tax returns and pay any debt owed to the government within the stipulated timeframe. Defaulting may attract some penalties. For instance;
- If you pay your taxes after they are due, you will be penalized with interest and if you have a balance owing, you will be charged a late-filing penalty. The CRA will begin charging compound daily interest to you from May 2, 2023 for late tax filing. Even if you are in financial difficulty, you should still submit your paperwork by the deadline to avoid this penalty.
- If you file after the deadline by more than one month, up to a total of 12 months, you will be subject to a late filing penalty of 5% of your 2022 sum owing.
- In more serious cases, the CRA may file a lawsuit against you if you fail to pay your debt, which might have substantial financial and legal repercussions for you. Normally, the CRA won’t file a lawsuit until 90 days have passed since the Notice of Assessment or reassessment was mailed.
- In extreme cases of tax default, the CRA may get a writ to seize and auction your assets and property if your debt is still unpaid. This might apply to your vehicle, piece of art, cottage, investment property, or personal residence. In the event that the CRA sells your assets, it will utilize the money to cover:
- your tax debt
- any costs charged by the bailiff hired to sell the assets on behalf of the CRA.
- You will still have to pay any remaining tax debt.
Request To Cancel or Waive Penalties or Interest
You can make a request to the CRA to cancel or waive penalties or interests, if you are unable to meet your tax obligations due to circumstances beyond your control.
The CRA can only grant relief within 10 years of your request date.
