Personal debt collection restrictions

There are restrictions to the Canada Revenue Agency’s (CRA) ability to take legal action, as outlined below.

The CRA will normally not start legal action until 90 days after the mailing date of the notice of assessment or reassessment.

A collection restriction also applies to personal income tax debt that is disputed under an objection or appeal. However, in cases when the taxpayer loses an appeal before the Tax Court of Canada, collection action resumes even if the taxpayer appeals that decision.

Exceptions

  • The CRA may take action to collect half the amount assessed and owing as a result of a tax shelter donation (for the 2013 and later tax years) at any time and regardless of whether an objection or appeal has been filed.
  • Set-offs can be issued as soon as a notice of assessment has been sent.
  • If the CRA determines there is a risk of not collecting all or part of your assessed tax debt, it can apply to the Federal Court or the superior court of a province for a jeopardy order. This allows the CRA to secure any assets that you own or to take immediate action to collect your tax debt. 

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