Voluntary Tax Disclosure: A Second Chance
Life sometimes gives you a second chance. Surprisingly, so does the CRA.
If you’ve not filed tax returns or made mistakes on tax returns, or left out relevant details, the Voluntary Disclosures Program (VDP) lets you correct those oversights without exorbitant penalties. By making a voluntary tax disclosure, you will pay the taxes you owe plus interest, but may be able to avoid other penalties, including prosecution.
Anybody can make a voluntary disclosure, including:
However, in order to take advantage of this program, your disclosure has to actually be voluntary. In other words, it can’t be done after the CRA has already come a knocking or taken action against you or someone close to you. Your disclosure must also be complete and reveal all information that was not given to the CRA when it should have been.
As a lawyer, Elizabeth Junkin can discuss the possibility of making a disclosure with you, without the risk of your discussions being divulged to anyone (like CRA) at a later date. We serve clients throughout Vancouver, Langley and Surrey. Everything you talk to us about is covered by solicitor-client privilege, and therefore confidential.
Elizabeth also brings her understanding of the inner workings of the “other side” to your discussions as you decide whether to make your disclosure.
Making Things Right
Some of the situations that you can correct through the VDP are:
- Not reporting taxable income, including foreign income
- Claiming ineligible expenses
- Failing to disclose foreign assets
- Failing to remit employees’ source deductions
- Failing to file an information return
- Not reporting an amount of GST/HST
There are a number of situations that are not part of the VDP, including disclosures related to bankruptcy returns, returns with refunds expected, and requests for penalty and interest relief.
After you make your disclosure, you will be informed about the next steps in the process, and expected to pay tax and interest due. Interest will accrue on any amount outstanding until everything you owe is paid.
The VDP is not an endless well of forgiveness. You are expected to keep your taxes accurate and up to date after a disclosure. If you make the same mistake or omission twice, you cannot use the VDP, unless the mistake is due to circumstances beyond your control and you admit that you previously made a disclosure.