Personal Finance

CRA Direct Deposit - any reasons why not to use it?

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  • Jun 26th, 2009 3:06 pm
[OP]
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Dec 9, 2007
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CRA Direct Deposit - any reasons why not to use it?

Actually my question is in title. My concern is in case if for any reason CRA decides that you are owing them money can they simply transfer money from you account in case if you have direct deposit set up. I'm not talking about not paying taxes or anything like that but cases when they do re-assessment and decrease amount of return.
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Jun 8, 2009
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No downsides. They can't just take money out of your account without your permission.
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Mar 30, 2004
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I've heard stories of people's refunds being refunded into accounts they closed years ago because the CRA never updated the information provided to them.

I just prefer having the physical cheques. Same reason i'll never allow pre-authorized payments from my bank account... even for something like rent - i'd rather write a cheque (which i dont pay for, yay citizens bank)
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Dec 24, 2001
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CorSter wrote:
Jun 25th, 2009 9:52 pm
I've heard stories of people's refunds being refunded into accounts they closed years ago because the CRA never updated the information provided to them.
This would be a valid argument against, but getting a refund in my account 2 weeks after I file is worth it to me. The government already knows about accounts in Canada, and if they want money for back or unpaid taxes, it's probably best you give it to them anyway.
[OP]
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LiquidGoop wrote:
Jun 25th, 2009 10:13 pm
This would be a valid argument against, but getting a refund in my account 2 weeks after I file is worth it to me. The government already knows about accounts in Canada, and if they want money for back or unpaid taxes, it's probably best you give it to them anyway.
As I said it's not about unpaid taxes (they have enough lawyer to quickly get a court order and seize you account anyway) but about they decide you owing them money (really or by mistake) and ops you account is short of 1000$ and you are not aware of that and then checks are bouncing and everything is in a mess. This is what I worry about.
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Sep 9, 2005
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CorSter wrote:
Jun 25th, 2009 9:52 pm
I've heard stories of people's refunds being refunded into accounts they closed years ago because the CRA never updated the information provided to them.
Even the CRA can't make a deposit into a closed account.

I've had direct deposit from CRA since it started, have changed my account numerous times, and have never had any problems at all.

If they attempt to deposit into an account that is closed, they simply issue a cheque instead as soon as the deposit is rejected. I can't think of any downside to direct deposit.
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pshch wrote:
Jun 25th, 2009 10:46 pm
As I said it's not about unpaid taxes (they have enough lawyer to quickly get a court order and seize you account anyway) but about they decide you owing them money (really or by mistake) and ops you account is short of 1000$ and you are not aware of that and then checks are bouncing and everything is in a mess. This is what I worry about.
No, if CRA is after you they will go after your account whether you have direct deposit or not. They will basically put a block on all your accounts (it becomes frozen).

This is why banks normally need to run your cheques through your account when you want to cash it. If the bank is caught cashing a chq when CRA has a block on your account, the branch that cashes the chq may be held liable. I've seen people try to pay their credit cards directly with cheques addressed to them. When you dig deeper you'll find their account has been frozen because CRA is after them. They want to try to get around paying them by attempting to have you deposit the funds to their credit card instead which shoudlnt' be allowed since CC payments need to be addressed to the bank.
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Apr 23, 2008
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One of my relatives works for the CRA.
OP wrote:Actually my question is in title. My concern is in case if for any reason CRA decides that you are owing them money can they simply transfer money from you account in case if you have direct deposit set up. I'm not talking about not paying taxes or anything like that but cases when they do re-assessment and decrease amount of return.
Yes, they can. They have to go to a manager to obtain approval, but no warrant is required. They can freeze your account if they need to do so.

Of course, they can search for your account with a quick credit check anyway or by simply demanding the info from the bank using your SIN. Thus, there is no reason not to use DD.
Xenko wrote:
Jun 25th, 2009 9:51 pm
No downsides. They can't just take money out of your account without your permission.
Not true. They can pull money out with nothing more than a CRA manager's signature.
CorSter wrote:I just prefer having the physical cheques. Same reason i'll never allow pre-authorized payments from my bank account... even for something like rent - i'd rather write a cheque (which i dont pay for, yay citizens bank)
What? That's not a reason. Do you really change your bank account so many times a year that you can't bear to modify the details with those who direct deposit to your account?
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joe1487 wrote:
Jun 26th, 2009 1:55 am
What? That's not a reason. Do you really change your bank account so many times a year that you can't bear to modify the details with those who direct deposit to your account?
Just to add with CRA MyAccount it's never been easier to update your banking information.
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Jun 29, 2008
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This can never happen for the following reason:

You are adding CRA as a payee to your online financial account (mostly chequing). Payees are paid by your permission ONLY in the form of Pay Your Bills. None of the Payee come at your Bank and say "someone is paying this amount I want to take some of it out" - Not gona happen.

And as the title say "CRA Direct Deposit" and not CRA Direct Withdraw. My friend, this is the CRA they can get you whenever you are in this country.
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Jun 8, 2009
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joe1487 wrote:
Jun 26th, 2009 1:55 am
One of my relatives works for the CRA.
Not true. They can pull money out with nothing more than a CRA manager's signature.
I should have been more clear in my response. If your account is in good standing, but you owe money, they won't just take it out of your account. If, on the other hand, you are behind and haven't been paying your taxes on time, that is a different matter.

Also, you can update your banking information with the CRA online, so just double check what account they have on file prior to submitting your return, and change it if necessary.
http://www.cra-arc.gc.ca/esrvc-srvce/tx ... u-eng.html
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joe1487 wrote:
Jun 26th, 2009 1:55 am
One of my relatives works for the CRA.



Yes, they can. They have to go to a manager to obtain approval, but no warrant is required. They can freeze your account if they need to do so.

Of course, they can search for your account with a quick credit check anyway or by simply demanding the info from the bank using your SIN. Thus, there is no reason not to use DD.



Not true. They can pull money out with nothing more than a CRA manager's signature.



What? That's not a reason. Do you really change your bank account so many times a year that you can't bear to modify the details with those who direct deposit to your account?

Your statements are very misleading. CRA cannot just take money out of your account. If you have failed to pay, and have refused, or failed to live up to payment arrangements CRA can issue "requirements to pay" to the bank which is similar to a garnishment sent to your employer. This allows CRA to intercept money deposited to your account, but not take money that is already there. To seize existing assets (including bank accounts) they have to go to federal court.

http://www.cra-arc.gc.ca/E/pub/tp/ic98- ... -1r3-e.pdf

6. Legal action to collect

If you do not pay an amount voluntarily, we may take legal
action to:
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joe1487 wrote:
Jun 26th, 2009 1:55 am
One of my relatives works for the CRA.
Yes, they can. They have to go to a manager to obtain approval, but no warrant is required. They can freeze your account if they need to do so.

Of course, they can search for your account with a quick credit check anyway or by simply demanding the info from the bank using your SIN. Thus, there is no reason not to use DD.

Not true. They can pull money out with nothing more than a CRA manager's signature.

What? That's not a reason. Do you really change your bank account so many times a year that you can't bear to modify the details with those who direct deposit to your account?
Er, they can do all of this anyway, weather you use direct deposit or not.

CRA knows all your bank accounts and can freeze them if they desire.

I have been using direct deposit for 5 years. I can't think of any reason to *NOT* do it, since it is not a privacy issue since CRA already has access to it.

Just for reference - once you submit your info, it will automatically be used for all federal government deposits, like your GST cheque, as well.
To be nobody but yourself - in a world which is doing its best, night and day, to make you everybody else - means to fight the hardest battle which any human being can fight; and never stop fighting. -- E. E. Cummings
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brunes wrote:
Jun 26th, 2009 12:14 pm
Just for reference - once you submit your info, it will automatically be used for all federal government deposits, like your GST cheque, as well.
No it won't. If you fill in the form for direct deposit for income tax it will also apply to your GST rebate and the WITB. But not the CCTB or UCCB, unless you check the appropriate box on the form.


You have to fill out a separate form to activate direct deposit for your kickback payment for being a member of the CPC. Oh wait, that is supposed to be a secret. I mean, there is no kickback payment. :twisted:
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ghostryder wrote:
Jun 26th, 2009 12:07 pm
Your statements are very misleading. CRA cannot just take money out of your account. If you have failed to pay, and have refused, or failed to live up to payment arrangements CRA can issue "requirements to pay" to the bank which is similar to a garnishment sent to your employer. This allows CRA to intercept money deposited to your account, but not take money that is already there. To seize existing assets (including bank accounts) they have to go to federal court.

http://www.cra-arc.gc.ca/E/pub/tp/ic98- ... -1r3-e.pdf

6. Legal action to collect

If you do not pay an amount voluntarily, we may take legal
action to:

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