Collection of tax debts in jeopardy

If the Canada Revenue Agency (CRA) determines there is a risk of not collecting all or part of your tax debt due to collection restrictions, it can apply to the Federal Court or the superior court of a province for a jeopardy order. This allows the CRA to take immediate action to collect your tax debt.

Under the Income Tax Act, the CRA can apply for a jeopardy order without informing you. As a result, you are not present in court when the CRA’s application is heard.

Based on the evidence the CRA presents, the court will decide whether it should grant a jeopardy order. If the court decides there is enough evidence to prove that delaying collection action will put collecting the tax debt at risk, it will grant a jeopardy order.

Serving a jeopardy order

The CRA must serve you with a jeopardy order within 72 hours of it being granted, unless the court issuing the order gives the CRA more time.

Challenging a jeopardy order

You can ask the court that issued the jeopardy order to review it within 30 days of being served with the order, or within a particular time frame set by the judge. You must give the CRA at least one week’s notice that you will be asking for a review by the court.

During the time that the review is taking place, the jeopardy order is still in effect and the CRA can continue to collect your debt.

After the court has reviewed the jeopardy order, it can confirm, set aside, or change it. The court’s decision is final. No further objections or appeals of the jeopardy order are allowed, by you or by the CRA.

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