On Friday, April 5th 2024 I woke up to an email notification alerting me, that my chequing account balance has dropped below $150 and I’m sitting dangerously close to the possibility of going into overdraft.

All of the blood from my head dropped into my stomach and my stomach dropped into my feet. I sat in disbelief, as the night before I had over $8,000 in that account.

My initial though was fraud, as I had my email account hacked the month prior. It was not hacked, my account was FROZEN by the CRA and they completely drained my account down to $0, even down to the last penny (8,220.36 to be exact) but who’s counting… oh wait, the CRA is!

I want to share my experience in the hopes that it can help someone else. Information seems to be mostly hearsay and it’s not easy to google CRA tax information, and good luck getting someone on the phone, let alone understanding them… here’s how I survived....

1. I had a secondary chequing account (that I didn’t use) with a credit card and line of credit attached to it. ​(Without this, I wouldn’t have survived financially).

2. I called all my auto-payees (mortgage, car loan, insurance…) and removed them from my frozen account, ​switching them over to my secondary chequing account. (I was SO scared this account would be frozen too!)

3. I removed my e-transfer email address from my frozen bank account. (So that my renters could pay me ​rent). Added my e-transfer email to my secondary bank account (You can’t make any type of transfer when ​your bank account is frozen).

4. I work for myself and receive monthly payments from 3 clients. I left my top-earning client to deposit my ​cheques into my frozen account, knowing it would be garnished.

5. I switched payments from my other two clients to my secondary bank account. (to financially live off of, ​because the CRA garnished 100% of my wages).

6. I transferred the exact amount of money out of my line of credit the night before my mortgage, insurance ​and car loan were to be paid automatically. And if any money was still in my account, I would put it back into ​my line of credit. Just in case the CRA garnished it, I’d at least have my line of credit to live off.

7. Still living it... TBC...

KEEP SCROLLING....

Can the CRA freeze your accounts and take everything?

Yes, If you are not a T4 employee, the CRA can and will freeze your account and garnish every penny, leaving ​you with nothing. If you are T4 employee, the CRA will garnish 50% of every paycheque until the total ​amount owing is garnished in full.

Can the CRA garnish your Child Tax Benefit Credit, if you owe taxes?

Yes, and they did. I was credited my CTBC of $376.66 into my frozen bank account on April 19th, 2024 and ​debited (garnished) on April 29th without notice.

Is it my right to access accurate and timely information from the CRA?

Yes, it is. However, in my personal experience, I did not have timely or accurate information throughout the ​entire process. (This is why I’m sharing my learnings :) Here is a link to your ‘BILL OF RIGHTS’.

Can CRA call wait times surpass 4 hours?

Yes, expect to wait on hold for a minimum of 2 hours to speak to a human representative.

Can I take out a line of credit or pull equity from my house to pay my back taxes owing?

No, you cannot get approved for ANY loan if you owe money to the CRA.

If I owe back taxes to the CRA, can I be assigned a collections officer to help me?

Yes, you can. But once you are assigned a collections officer, they will be ON TOP of your payment plan. ​Depending on your financial situation, this can be a good thing or a bad thing.

Am I safe from being garnished if I am on a payment plan with a collections officer with the CRA?

No, you are not safe. I was on a payment plan (making regular payments of $2,800 monthly). I thought I was ​safe.

Is it true that the CRA did not collect back taxes during Covid?

Yes, The CRA paused the tax garnishing program during covid, re-opened the program in October of 2024.

What is the current CRA interest rate on income tax owing?

In June 2024, the Canada Revenue Agency collects 10% interest rate on all income tax owing. The rate will ​drop to 9% July-September 2024. To learn more about how the CRA interest rates work and how often they ​change, click here.