Voluntary Disclosure gives Tax Amnesty and a Fresh Start
Didn’t declare when you were paid in Cash? Deducted personal expenses from your income? Made a mistake when calculating your taxes? Led astray by tax preparer? Overlooked amounts?Simply got the law wrong or misunderstood it? Worried your hard-earned money will be taken away from you and your family? A Voluntary Disclosure prepared by a professional accountant may be the best solution. Don’t wait and hope the CRA won’t catch the errors. Get penalties and criminal prosecution waived though the CRA’s Voluntary Disclosure Program going back up to 10 years.
There is no strict limitation period for income taxes. If the person who filed your return has made any misrepresentation because of neglect, carelessness, or willful default, or has committed fraud in the return or any supplied information, then the Minister can assess or reassess the taxpayer affected at any time. Yes, the CRA can go back 5, 10, 15, 20 or more years. Any wrong information is a misrepresentation, and the real challenge for the CRA is to show that the person committed fraud or was negligent, careless, or should have suspected something but chose to not investigate. Often, this standard is met by the CRA, although a professional accountant can help fight the CRA on this.
Although the CRA can go back to as far as it wants to, the Voluntary Disclosure Program can only provide penalty (and interest) relief going back 10 years from when you come clean. That said, a Voluntary Disclosure will protect you against criminal prosecution no matter how long ago the misrepresentation was made. A professional accountant may also be able to limit the CRA’s inquiries to the last 5 to 10 years, giving you full benefit of the Voluntary Disclosure Program’s Tax Amnesty. A successful voluntary disclosure will often require you to only pay the taxes you had to pay anyways. This is a very generous way to come clean and have a fresh start.
A great deal of careful work goes into making a successful Voluntary Disclosure application. There are a number of criteria that your professional accountant can make sure you meet. Avoid the sleepless nights and uncertainty, contact a professional accountant and start the Voluntary Disclosure process.
Disclaimer: Articles are general info only and do not constitute tax advice & cannot be relied upon.
Sam Faris is a Toronto-based Chartered Professional Accountant who practices as an independent consultant on high-level Canadian tax matters and handling disputes with CRA.He also published an article recently in the business magazine: HERE.