Payment arrangement with the CRA

Buyers and sellers meet this when diligence finds a CRA balance owing before closing. In My Business Account the CRA lists debts that can be scheduled online, including corporate income tax (T2), payroll deductions and GST/HST. For how to find out what is owed, see how to check for CRA debts before buying a business.

What the arrangement requires

The CRA says that once payments are set up, the taxpayer must keep paying on the agreed dates, file all future returns on time and stay up to date with its obligations, and that the CRA may review the arrangement periodically. It also says it may apply other federal payments the taxpayer receives to the debt. To change an arrangement, or if a payment cannot be made, the taxpayer calls the CRA.

What to ask

• Whether an arrangement exists, who agreed to it for the corporation, and whether payments are current
• The CRA’s own statement of the balance and the schedule, not only the seller’s description
• Whether it stays with the corporation under the deal structure proposed, or must be settled at closing
• Whether a collections officer is assigned; the CRA says to call the number in that officer’s letter as soon as possible