What is the Voluntary Disclosure Program?
You may be able to come forward voluntary through the Voluntary Disclosure Program (VDP). This allows the taxpayer to file or correct a return before the CRA discovers the error or conducts an audit. Following a valid disclosure, the CRA agrees to forego criminal prosecution and will waive some or all of the penalties and may waive some interest if you are eligible for the program. For more about the VDP, click here.
What are the circumstances in which the VDP is recommended?
The VDP is recommended where taxpayers have failed to file tax returns or made errors or omissions on your tax return and where the CRA has yet to undertake any . Many individuals are not up to date with their returns or their GST remittances, or fail to file disclosure forms, particularly as it relates to the ownership of foreign property, having foreign income, or holding shares in a foreign corporation.
How do I qualify for the Voluntary Disclosure Program?
To qualify for relief through the Voluntary Disclosure program, the application must be "voluntary", "complete", involve the potential application of a penalty, and involve information that is at least a year past due. Under the new VDP rules effective March 1, 2018, the disclosure must also accompany payment of the estimated tax owing.
I just received a phone call from the CRA about my tax return. Can I still apply for the Voluntary Disclosure Program?
No, you cannot. By “voluntary,” the CRA must not have contacted you regarding the improper filing or failure to disclose. The moment you receive a letter or call from the CRA regarding your failure to file correctly, you are disqualified from the program. It may be possible to recieve some interest or penalty relief via a taxpayer relief request, or you may be able to mitigate the situation by responding to an audit or arbitrary return effectively.
Do I need a tax lawyer to apply for the Voluntary Disclosure Program?
We strongly recommend that you consider working with a lawyer. A lawyer can first determine if you are eligible for the program, fill out the application indicating that the client is eligible for the program, coordinatae past returns and information disclosures, and coordinate payments for outstanding payments, if any. Lawyers can also assist by responding to CRA decisions that provide limited relief, and discussion with lawyers attract enhanhced confidentiality via solicitor-client privilege
