Third Party Payment Demands to your clients are one of the many tools in the CRA toolbox. When a small business has been running a large tax balance for several years, the Taxman can suddenly get tired of waiting to be paid. Without warning he will send letters to or, even worse, visit your principal clients to serve them with Third Party Requirement to Pay letters. This is a legally binding demand that any monies due to be paid to you must instead be paid directly to the tax authority – federal or provincial. If your clients defy the order and continue to pay you, they may be held liable for the unpaid tax balance.
How does the Taxman know the names of your clients? We see a pattern in which the CRA demands to see your books and records for a “trust audit”. The auditor visits your premises to check that you are reporting and filing accurate source deductions or HST remittances. At the same time, he is reviewing your invoices, he is gathering the names and addresses of your clients. Then, when he determines you’re not likely to be able to pay off your tax bill in full within the next 12 to 24 months, he goes straight to your clients to collect and force you into bankruptcy.
Before you panic and fall into the bankruptcy trap, consider retaining experienced legal tax counsel. In cases such as this, we consider the value of an injunction in the courts for a stay of collection action to permit you the time to organize your finances to address the tax debt. Where circumstances warrant, we also seek cancellation of penalties and interest through submission of an application for Taxpayer Relief. This protects your legal right to due process, as set out under section 220(3.1) of the Income tax Act and/or section 281(1) of the Excise Tax Act.
Third Party Payment Demands to your clients are one of the many tools in the CRA toolbox. When a small business has been running a large tax balance for several years, the Taxman can suddenly get tired of waiting to be paid. Without warning he will send letters to or, even worse, visit your principal clients to serve them with Third Party Requirement to Pay letters. This is a legally binding demand that any monies due to be paid to you must instead be paid directly to the tax authority – federal or provincial. If your clients defy the order and continue to pay you, they may be held liable for the unpaid tax balance.
How does the Taxman know the names of your clients? We see a pattern in which the CRA demands to see your books and records for a “trust audit”. The auditor visits your premises to check that you are reporting and filing accurate source deductions or HST remittances. At the same time, he is reviewing your invoices, he is gathering the names and addresses of your clients. Then, when he determines you’re not likely to be able to pay off your tax bill in full within the next 12 to 24 months, he goes straight to your clients to collect and force you into bankruptcy.
Before you panic and fall into the bankruptcy trap, consider retaining experienced legal tax counsel. In cases such as this, we consider the value of an injunction in the courts for a stay of collection action to permit you the time to organize your finances to address the tax debt. Where circumstances warrant, we also seek cancellation of penalties and interest through submission of an application for Taxpayer Relief. This protects your legal right to due process, as set out under section 220(3.1) of the Income tax Act and/or section 281(1) of the Excise Tax Act.
Tax Law
DioGuardi offers solutions for tax problems such as:
Unreported income
Unfiled tax returns
Payment arrangements
Unpayable tax debt
Tax dispute litigation
Criminal tax defense
Wills, Estates & Trusts
DioGuardi Law offers these will, estate and trust services for individuals and business-owners:
Wills
Preparation of trust agreements
Powers of attorney
Estate administration
Probate
Representation in estate driven litigation
Real Estate
DioGuardi Law can assist you with all your real estate needs including:
Newly constructed/Resale
Purchases and Sales
Title transfers
Leases
Private mortgages
Refinancing
Condominiums
Vacant land
Tax Debt Relief
When your tax balance is too large to be affordable, DioGuardi Law can protect your home, your cash flow and your financial assets from the Taxman. It is essential that we begin planning a strategy before the CRA registers a lien against your properties or seizes financial accounts, and before you engage with an insolvency trustee.
Business & Tax Planning
DioGuardi Law has the experience to provide:
Resident and non-resident corporate restructuring
Optimum use of holding corporations
Continuity and succession planning
Tax-free transfers
Losses and ABIL planning
Making interest tax deductible
Small business planning
Corporate & Commercial Law
DioGuardi Law have represented business clients for the last 50 plus years and have supported their legal requirements on an on-going basis by offering the following services:
Incorporations and corporate governance
Corporate reorganizations and transactions for the directors and shareholders
Negotiation and drafting of agreements, professional corporations, minute book maintenance
Brigitte DioGuardi
B.A., LL.B
Brigitte obtained her Law Degree from the University of Sheffield in the United Kingdom. Upon her return, she qualified for the Bar and was called to the Law Society of Ontario (formerly the Law Society of Upper Canada) in 2002. She was also a member of the Bar of British Columbia and headed up the Vancouver office of DioGuardi Tax Law. Fluently bilingual in English and French, Brigitte has broad experience in the areas of:
Joyce Bruno has worked as executive legal assistant to Paul Dioguardi for 35 years and continues to offer her expertise and experience to the Dioguardi Law firm. Joyce’s role has evolved over the years and has acquired and developed many skills. She is an invaluable asset in case management and ensures the smooth running of our office.
Paul DioGuardi
B.A., LL.B, KING’S COUNSEL, SENIOR COUNSEL
Paul obtained his Law Degree from Queen’s University in 1964. He is a member of the Bars of Ontario, British Columbia and the Turks and Caicos Islands, a British tax free territory in the West Indies. He has over 50 years of experience and was trained at the Ottawa head offices of Revenue Canada and the Tax Litigation Section at the Department of Justice. Paul has had and continues with an extensive career in various areas of law such as:
