We solve serious CRA tax problems

Introduction to the Voluntary Disclosures Program

Canada’s income tax system is a self-reporting and self-assessing system. This is different than the tax systems of other countries where the government assesses the taxpayer and financial intermediaries, and other payors report the various income amounts to the government for purposes of assessment. This puts the onus of getting the income reported properly and the taxes assessed correctly on the taxpayer. The government receives information returns from a limited number of financial intermediaries (such as T4, T4A, T5 slips and so on), issues requests for documents or information, and conducts audits to secure the integrity of the tax system. These measures used by the government are not going to be perfect and there is a chance that people who fail to report or misreport income do not get caught for a number of years. It is because of this delay and the government’s desire to have people come forward voluntarily to save the resources of the Canada Revenue Agency (CRA), that the Voluntary Disclosures Program exists.

The Voluntary Disclosures Program has to balance the fact that most taxpayers file and pay their taxes on time and accurately with the desire to encourage non-compliant persons to come forward. In doing so, it has to provide an incentive to come forward, but make sure that the inventive does not reward taxpayers who are non-compliant for whatever reason.

What is a Self-Reporting and Self-Assessing System?

In a self-reporting system, it is the taxpayer who has to report the various sources of income and gain that the taxpayer has. This means that it is up to the taxpayer to determine what amounts the taxpayer has a right to receive or has received are taxable and what amounts are not taxable. Additionally, the taxpayer has to determine the correct character of these taxable amounts, as not all amounts are taxed the same way (for example, capital gains are only half included in income, meaning that half of a capital gain is tax free). The reason the government places this onus on the taxpayer is because it is the taxpayer, and not the government, that has the information necessary to determine the tax liability of a taxpayer. It’s true that the government receives some information about a taxpayer’s financial affairs, but it does not receive enough information to be able to get a full picture.

After self-reporting, the taxpayer then has to self-assess the taxes due to the government. This means adding up the various amounts correctly, taking any deductions or credits available, applying the correct rates, and then coming up with a balance due.

What is the Voluntary Disclosures Program?

The Voluntary Disclosures Program – often also called the tax amnesty program – is a program that gives taxpayers a chance to come forward and correct mistakes on their tax returns or report amounts that they failed to report. There are many reasons, both innocent and nefarious, why a taxpayer may not have reported or correctly reported information on a return, or even failed to file a return that was required. Whatever the reason for a taxpayer not fully meeting their tax reporting obligations, the Voluntary Disclosures Program provides both the opportunity and various incentives to come clean, be up-to-date, and start fresh.

The Voluntary Disclosures Program was amended starting March 1, 2018. The gist of the change is that the program now has two tracks – a General and a Limited program. The general Voluntary Disclosures Program offers relief from all penalties that could have been imposed, some interest relief, as well as immunity from criminal prosecution. The limited program, however, provides limited relief in certain circumstances (relief from penalties other than gross negligence penalties, no interest relief, and immunity from criminal prosecution). The limited Voluntary Disclosures Program is meant for taxpayers whose non-compliance has an element of intentional conduct. To determine whether or not to place a taxpayer in the limited or general program, the Canada Revenue Agency will consider the following factors: (1) were efforts made by the taxpayer to avoid detection by the CRA?; (2) what is the quantum, or dollar amount, involved in the non-compliance?; (3) how long has the non-compliance been going on for?; and (4) how sophisticated in the taxpayer who is non-compliant?

Not only is the financial relief in the limited program curtailed, but taxpayers are also required to give up certain rights to be accepted. Specifically, taxpayers are required to waive their right to object to the assessment resulting from the disclosure, meaning that they cannot file a Notice of Objection to the CRA’s Appeals Division. Additionally, taxpayers are also required to waive their right to appeal to the Tax Court of Canada for anything that is related to the information disclosed in the voluntary disclosure. There two rights of appeal are not waived under the General Voluntary Disclosures Program.

There are a few other limitations. For both the limited and the general program, relief is only available for the ten years preceding the most recent tax year. Even if a taxpayer’s disclosure goes back more than 10 years, relief for interest or penalties for the years earlier than the ten-year limit is simply not possible. The interest relief under the general program is also limited. Not all the interest accrued over the past ten years is forgiven. Rather, only up to half the interest owed is forgiven under the new general program.

Schedule Assessment

What are the Eligibility criteria for the Voluntary Disclosures Program?

Not all disclosures by taxpayers are accepted by the CRA under the Voluntary Disclosures Program. To be accepted under either program, the disclosure has to meet some pre-conditions. To be eligible:

(a) The disclosure must be voluntary, meaning that the CRA must have no information about the taxes owed by the taxpayer (this is a complex criterion that cannot be easily summed up in a general information article such as this);
(b) The disclosure must be complete, meaning that the taxpayer has to disclose all the information for all the years where that taxpayer’s filings were incomplete or inaccurate, even if this stretches past the ten year limit for granting relief;
(c) There must be taxes owing by the taxpayer, meaning that the program does not apply to taxpayers who are owed refunds;
(d) The information must be more than one-year over-due, meaning that taxpayers can only use the program to disclose information that is at least one-year past due;
(e) The taxpayer must estimate the taxes owing from the disclosure and make payment for the taxes owing (or come up with a suitable payment arrangement or security for payment).

Taxpayers usually only get one shot at making a disclosure that meets the pre-conditions for acceptance. Given the potential complexity of the pre-conditions as well as the tax filings of the particular taxpayer, it is advisable to get the help of a Chartered Professional Accountant (CPA) who is an expert in disputes with CRA. Such a professional can make sure that you stand the best chance of getting amnesty along with the financial relief that accompanies a successful voluntary disclosure.

Why Come Forward?

There is no absolute limitation period for the CRA coming to audit or assess a taxpayer in Canada. The reality is that the CRA can go back to the dawn of your financial life and, where the conditions for a reassessment beyond the normal reassessment period are met, reassess a taxpayer for any and all years. This, coupled with the fact that failing to file your taxes or report amounts often come with significant penalties, and that the penalties and taxes owing are both subject to compound interest at a relatively high interest rate, creates large financial risks for taxpayers who haven’t fully or accurately filed their tax returns. In many cases, the penalties and interest will exceed the taxes owing. This may well result in the taxpayer losing all of their hard-earned assets and, perhaps, even having to file for bankruptcy protection. In addition to financial losses, taxpayers could face criminal tax evasion charges, adding an additional financial burden and the risk of jail time.

The Voluntary Disclosures Program provides both financial incentives as well as protection from criminal prosecution for taxpayers who successfully patriciate in the program. The CRA’s decision to grant relief is discretionary, but where a taxpayer meets the published conditions for relief, the CRA has to grant the relief advertised. The fight with the CRA often revolves around whether the conditions have been satisfied and the taxpayer is entitled to relief. Because of this, and the risks that come along with not being successful, it is important to make sure that a taxpayer uses a Chartered Professional Accountant (CPA) who is an expert in disputes with CRA.

FAQS

How far back can the CRA go?

The CRA can go back for three years to reassess a tax. It starts after the date on the initial Notice of Assessment. In case the CRA thinks that there is a fraud committed or you have misrepresented yourself, the agency can go back farther.

What is the CRA penalty for late filing

The CRA penalty for late filing is a 5% charge of any balance you owe plus 1% of the balance due for each full month that your tax return is late, to a maximum of 12 months. The late-filing penalty might be higher if the CRA charged a late-filing penalty on a return for any of the three previous years.

Should I consent to the disclosure of tax return information?

Yes, you should consent to the disclosure of tax return information, but only to the person about whom the information relates. This is mandated under the Income Tax Act, the Excise Act, and the Excise Act 2001. The Privacy Act and the Access to Information Act do not allow the disclosire of personal information, except on situations stated in the legislation. The CRA protects all taxpayers’ information securely.

How far back can the CRA go?

The CRA can go back for three years to reassess a tax. It starts after the date on the initial Notice of Assessment. In case the CRA thinks that there is a fraud committed or you have misrepresented yourself, the agency can go back farther.

What is the CRA penalty for late filing

The CRA penalty for late filing is a 5% charge of any balance you owe plus 1% of the balance due for each full month that your tax return is late, to a maximum of 12 months. The late-filing penalty might be higher if the CRA charged a late-filing penalty on a return for any of the three previous years.

Should I consent to the disclosure of tax return information?

Yes, you should consent to the disclosure of tax return information, but only to the person about whom the information relates. This is mandated under the Income Tax Act, the Excise Act, and the Excise Act 2001. The Privacy Act and the Access to Information Act do not allow the disclosire of personal information, except on situations stated in the legislation. The CRA protects all taxpayers’ information securely.

About the Author

pro-tip

Pro Tip

ACCESSING THE SMALL BUSINESS DEDUCTION IN YOUR BUSINESS

The Small Business Deduction gives businesses a tax deduction on the first $500,000 of income. This saves an eligible corporation around up to $50,000 in income taxes. There are a number of conditions that have to be met to be eligible for this deduction.

Ria Frith
Ria Frith
1709742935
Excellent service! Sam helped make a stressful, complicated situation much easier to deal with, showing great patience and compassion. I'm very grateful.
farshid tayyeb
farshid tayyeb
1709600147
Sam and his team helped me with filing my complicated corporate tax. He is very informative, and knowledgable and most importantly always available to answer your questions and concerns. He is very detailed and spent a lot of time preparing my tax file and fixing my previous accountant’s mistakes. I should also mention that his fee was very fair. Thank you so much Sam!
Vero Land
Vero Land
1708810543
Had a meeting with Sam regarding my tax matter with the CRA. Sam was informative and provided an excellent advice to handle the situation.
David Kline
David Kline
1708785450
CRA audited me based on net worth audit. This audit lasted almost 2 years. I suffered emotionally and financially as a result. Bringing Sam and his team into the picture was the best decision that I have ever made. Sam followed a very unique strategy which led to dropping the taxes to my satisfaction. Thanks Sam for all your hard work.
Tomer Pitel
Tomer Pitel
1708694932
I wish I met Sam of Faris CPA many years ago. He would have saved me lots of money and kept me out of troubles with the CRA. His performance exceeded expectations. 10 stars
Madison Wortman
Madison Wortman
1708657850
Sam is the man to handle any CRA dispute. Very happy with his services and the results that he achieved for me.
Gwen Meador
Gwen Meador
1708535537
Sam Faris helped me with the HST audit which involved building a new houses. CRA proposed to assess the houses that I built higher than it should be. Sam approach was convincing and knock down the assessment significantly. Thanks to Sam that I did not have to file objection and the issue was settled at the audit stage with the least cost.
Rafa Vargas
Rafa Vargas
1706749169
Hire Sam if you have any tax issue with the CRA. He is highly reliable and trust worthy and will absolutely look after your best interest. Mark my word on this as this is based on my recent experience having Sam dealing with my issue with the CRA.
Joseph Qassis
Joseph Qassis
1706481745
Extremely helpful and high work ethics. Thank you for all your help Sam for solving my tax issues.
NewLeaf Dental
NewLeaf Dental
1706381674
I was referred to Sam Faris by a tax lawyer in the city. Sam helped me with a very complicated tax audit by the CRA. Results exceeded expectations and now I can focused more in my business as Sam is defending me with the CRA problems.
John S
John S
1706380825
Best CPA and tax expert in the country. Sam helped me with a very complicated tax problem which involved voluntary disclosure. CRA accepted Sam argument and submission without a single question asked. He saved me the penalties and interest. Highly recommend Sam and his team.
Loris Layus
Loris Layus
1706153940
Very happy with Sam services. Sam helped me to resolve a complex tax audit by CRA. Results exceeded expectations and highly recommend Sam and his team.
Angela Simpson
Angela Simpson
1705181007
Great experience, very informative, and knowledgable!
Sam Faris helped us with a serious matter with CRA. He is extremely knowledgeable, efficient and more importantly has very high work standards. I would highly recommend Sam to anyone who is facing an issue with CRA.
Rey459
Rey459
1704088130
Sam helped me with a very difficult tax issue which involved voluntary disclosure. He submitted a perfect package where CRA did not bother to ask any question. My package was approved from the first time with no issue at all. I must admit that after shopping around, Sam’s fee was the most reasonable fee among all the professionals including 2 tax law firms. Thank you Sam for all your hard work.
Soysal Realty
Soysal Realty
1704086408
A trusted tax firm who handled my complicated tax problems perfectly with the least cost. Sam and his team exceeded expectation. Highly recommend.
Waseem Khoury
Waseem Khoury
1702982945
Luckily I was referred to Sam and his team by a friend of mine. After wasting time and money with a tax lawyer, finding Sam was a big relief. He was able to resolve my tax issue with CRA on timely basis and with the least cost. Many thanks Sam.
maria martins
maria martins
1702833053
Super professional with high work and ethics standards. Highly recommend Sam and his team. Thanks for the hard work.
Seth Woodard
Seth Woodard
1702580217
Sam was super helpful and responsive, extremely fast, and very easy to work with. Would recommend to anyone. Thanks Sam!
MARIA FUDA
MARIA FUDA
1701962330
Without doubts, the team at Faris CPA is the best out there to dispute CRA decisions. They are focused on details and are second to none. Their fee is fair and more importantly, they are honest, reliable and meeting their promises. Don't bother to hire other professionals and of course no need for tax lawyers who charge you excessive legal fees. Hire Sam and his team and they can get the job perfectly done and on a timely basis with the least cost. Very grateful to Sam for all the hard work on my file. I am lucky to know you and because of you, I have no concerns whatsoever if CRA tries to attack me and attack my business in the future.Thank you Sam.Maria Fuda,Litewave Communications
Paulina R
Paulina R
1701920055
Very helpful and super efficient. Sam is an expert with tax problems and will help you in every aspect with the least cost. Thank you so much for all your hard work!!
jonathan sousa
jonathan sousa
1701786708
Sam is a wealth of knowledge. I would highly recommend his services to friends and family.
Scott Dalziel
Scott Dalziel
1701716742
Sam and Edward were extremely helpful and very timely in providing their services! They provided great service at a very reasonable price.
David Lonergan
David Lonergan
1701716732
Sam Faris and his team are EXPERTS in fighting the CRA / Canada Revenue Agency. I cannot say enough good things! Save your money and don’t hire a tax lawyer. They can do it ALL and save you the legal fees. Sam and Team will get you the best outcome for a very reasonable fee. I HIGHLY RECOMMEND.
Colin Simpson
Colin Simpson
1701454466
Sam Faris is an excellent accountant who is an expert in CRA issues. He is very knowledgeable and I highly recommend him.
Very professional and high work ethics.
Ryan Butao
Ryan Butao
1700422012
Ana Santos
Ana Santos
1699467169
Amazing work and great exceptional service.
Edden Y
Edden Y
1699118104
Sam Faris is highly professional and keep his promises. He promised me a fair resolution to my tax issue and he met the promise. His fee is very reasonable too.
Steve Hayward
Steve Hayward
1699045891
Sam helped me out with a complicated (to me) tax issue I had. He was super responsive and walked me through everything. I had a follow up question a few months later and he responded within an hour. Highly recommended.
Marcin J
Marcin J
1698918573
Very professional support for international taxes.
Gol Zar
Gol Zar
1696091250
Sam is extremely knowledgeable with tax issues with CRA. He provided me the best advice which saved me from troubles. His fee is reasonable too. Thank you Sam and I will recommend you to my people.
peter lozier
peter lozier
1694887202
I had the absolute pleasure of working with Sam Faris and I can't express enough how thrilled I am with the service I received. From start to finish, the experience was seamless and efficient.Sam is a true expert in Canadian tax regulations. he demonstrated an impressive knowledge of the Canadian tax code, which immediately put my mind at ease. He was able to answer all my questions and provide valuable insights that helped immensely with Canadian tax laws.What truly sets Sam apart is their incredible speed and attention to detail. I submitted my tax documents, and he worked diligently to complete my return in record time, all while ensuring it complied with the Canadian tax requirements. I was amazed at how swiftly they turned around my taxes without sacrificing accuracy. It's evident that he has a deep understanding of the Canadian tax system and can navigate it with ease.Throughout the entire process, Sam was not only professional but also incredibly personable. They made what is typically a stressful time of year into a stress-free experience. Their friendly demeanor and willingness to explain complex Canadian tax concepts in simple terms made me feel valued as a client.
Nadine Mortada
Nadine Mortada
1694778156
I received the best tax advice for my international tax issue. Thank you Sam for all your help.
Shams Hirji
Shams Hirji
1693968913
Sam is the most trusted advisor amd accountant in personal and corporate accounting. Creative CRA resolution specialist. I highly recommend Sam.Call him today for all your issues !!
Haifa Rizk
Haifa Rizk
1693766122
Sam Faris has provided me with he best solution to dispute CRA audit. I highly recommend Sam for any tax problem.
Ercan Coşkun
Ercan Coşkun
1692485940
Sam is the right guy to fight CRA. Sam helped me to resolve a serious issue with CRA. He went above and beyond and got me the best results. 10 stars
Sam helped me with the voluntary disclosure program to file all my outstanding tax returns. He saved me taxes and penalties and his fee is very reasonable. I highly recommend him to any problems with CRA.
Jack CHaci
Jack CHaci
1692485321
Got a great help from Sam and his team regarding very complex tax matters with CRA. Thank you for the wonderful job.
Best Service
Helwe Najami
Helwe Najami
1692407521
Excellent experience with Sam Faris and his team. They achieved the best results for me with CRA. Thank you Sam for all your hard work. I will definitely recommend you for families and friends.
Luis Arcangel
Luis Arcangel
1692380866
Thank you for everything you have done for me-
Ken Weakley
Ken Weakley
1692035734
Faris cpa and his team recommended to me by a family member. Many thanks to Sam Faris and his team for all of their hard work. I highly recommend Sam Faris and his team for any tax problems with CRA. 10 stars
Dealt with top tax lawyers in the city and they could not get me good results. I was referred to Sam Faris by another tax lawyer. Sam has dealt with my case perfectly and got me the best results i would expect to get. Dont pay legal fee. Hire Sam and he will do it all and will be sleepless until your case is settled to your satisfaction.
Ethem Duranöz
Ethem Duranöz
1691266452
Faris cpa help me ti file my outstanding tax returns for many years under voluntary disclosure program. he exceeded my expectations. he saved me lots of money and more importantly i can sleep well at night. thanks Sam and team.
Sam is the greatest tax acc I know that I ve dealt with .He helped me get through my tax problems he is really helpful.I highly recommend him .
Magdi Barbara
Magdi Barbara
1690820211
Extremely happy with Sam and his team. Sam saved me significant amount of taxes owing to CRA. Most importantly he was able to settle with CRA to my satisfaction. Highly recommend his services.
Direct Limo
Direct Limo
1690819712
Top tax expert in the country. Sam has helped me with a big issue with CRA. He exceeded my expectations and now I live peacefully as I have Sam around to protect me.
KV NT
KV NT
1689908236
Angelo Vretos
Angelo Vretos
1689904994
Very Professional, Expert in CRA disputes and I would rate him 10 stars.
Vanessa Ly
Vanessa Ly
1689904640
Sam is very knowledgeable and an expert in CRA tax disputes. Highly recommend!
Hailey Buhler
Hailey Buhler
1689904530
Sam is professional and an expert in CRA tax disputes.
Duke OFOTARE
Duke OFOTARE
1689685673
Had a major problem with CRA. No one was able to resolve it. I was referred to Sam Faris by a tax lawyer. He exceeded my expectations. He was able to dispute CRA decision and was able to significantly reduce the amount owing. Many thanks to Sam and his team.
Next Reviewsjs_loader