Hoyes Michalos Comments on Making a Proposal to Revenue Canada

There is only one possible method to get Revenue Canada to accept less than the full amount owing for taxes. To make a deal for less than the full amount owing, you must file a bankruptcy proposal to Revenue Canada.

In a proposal to creditors, all creditors are offered the same "deal", and the "deal" must be better than they would receive if you were to file for personal bankruptcy.

In order for your proposal to Revenue Canada to be accepted, it must contain the following terms:

1. All tax returns must be filed and up to date prior to the acceptance of the proposal.
2. All tax returns due during the proposal period must be filed when due.
3. All taxes owing during the proposal period must be paid as they become due.  (The consumer proposal will only include taxes owing prior to the proposal date).
4. In the event that taxes for prior years are re-assessed and a refund is due, that refund must first be applied to Revenue Canada's outstanding indebtedness.

In certain circumstances, Revenue Canada may require additional terms.

Why will Revenue Canada only make a deal if you file a proposal?

Revenue Canada wants to ensure that all of your assets are disclosed, and that all debts are being treated equally.  The only way they can ensure this is by requiring you to file a formal proposal to Revenue Canada.

As a consumer proposal is a complicated procedure, to file a proposal to Revenue Canada you must contact a licensed trustee. At Hoyes, Michalos & Associates Inc., we offer a free consultation to assist you in determining your best course of action.  Please contact our bankruptcy trustees in Ontario today, they are happy to help.