When is it Time to Get a Tax Lawyer?

November 22, 2018

Dealing with the Canada Revenue Agency (CRA) generally isn’t something you want to do alone. But how do you know if you need a tax lawyer or an accountant?

We’re breaking down some common situations to help you decide.

Court Hearings

If you are going to court, you likely need a tax lawyer. Accountants can represent their clients in some Tax Court of Canada cases, but a tax lawyer will more often be better trained in the proceedings. This is especially true if the case being heard has to do with tax evasion prosecution or failure to file tax returns, as these could end up in the criminal court.

Tax Returns and Forms

These do not require a tax lawyer in Canada. Preparing tax forms and Canadian tax returns can be done by a tax accountant or a qualified financial professional. In fact, tax lawyers often aren’t insured to fill out these forms for clients.

Dealing with Tax Debt

If you are being prosecuted for a tax debt, as mentioned above, you will likely need a tax lawyer.

However, if the issue is that you have a tax debt but can’t pay it, then you have a financial problem, not a legal one. A financial consultant can help you make a plan to pay off your tax debt and stop CRA collections.

CRA Collections

CRA collections can take several forms, including a frozen bank account, wage garnishments, contacting clients for payment (if you are self-employed or a business), asset seizures, and court action.

The instances where you might need a tax lawyer would be if:

You were being prosecuted in tax court.
You wanted to get a court order to stop the collection action.

However, in the latter instance, you would likely still want to start by talking with a financial consultant to see what options you have before pursuing the court process.

CRA Tax Audit

This can often be undertaken by either a tax lawyer or a tax professional, but it may be more affordable to go with the financial professional. Weigh the costs and your options.

Other times when you might need a tax lawyer include:

Setting up an initial business structure or restructuring an existing business.
Selling a business.
Immigrating to or emigrating from Canada.
Death or divorce.

When you’re considering whether you need a tax lawyer or not, ask yourself if your problem is legal or financial. Do you have a court date? Are you being threatened with court action? Do you need to review a legal document? Those all might be times when you need a tax lawyer.

But many tax cases start well before a tax lawyer is required. Dealing with an unpaid tax debt, wondering what to do about CRA collections, questions about tax returns and forms — those are all matters that often don’t require a tax lawyer, or cannot even be completed by most tax lawyers in some cases.

In those instances, you would be better served by looking for an organization that deals directly in financial tax matters. At Fuller Landau Debt Solutions we can help you manage many tax issues, including CRA collections, tax debt, delinquent tax returns, and more.