If you are considering filing a consumer proposal before the end of 2011 and you owe money to Canada Revenue Agency regarding income tax debt you might wait to file until January. The reason is that when you file a consumer proposal the date of the proposal for income tax purposes is December 31 of the prior year. This means that if you file a consumer proposal in 2011 the date of your proposal for income tax purposes will be December 31, 2010. Therefore your proposal will include all income tax debts owed up to December 31, 2010, but you will be responsible for any income tax debt relating to 2011.
If however you file your consumer proposal in January 2012 the date of your proposal for income tax purposes will be December 31, 2011. Therefore all income debt owed up to December 31, 2011 (including 2011 tax year) will be included as part of your consumer proposal. For more information on how income tax debt is affected by filing a consumer proposal please click here.
-Chris Welker
