Planning to file a Voluntary Disclosure Application ?

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The Voluntary Disclosure Program, also known as Canadian tax amnesty, allows taxpayers with unfiled Canadian income tax returns or unreported income to correct incomplete or inaccurate information, or disclose information that has not been reported in previous dealings with the CRA (Canada Revenue Agency). Taxpayers can avoid being prosecuted or penalized by making a valid voluntary disclosure.

Tax problems ?

Fix the following through the Voluntary Disclosure Program

Unfiled income tax returns

Unreported taxable income

Claims of ineligible business or personal expenses

Unreported source deductions of employees

Unreported or unfiled GST/HST

Improper claim of income tax refunds or rebates

Unreported foreign-sourced income

Unreported off-shore assets including bank accounts valued at $100,000 or more

Voluntary Disclosure (VDP) in Canada

Benefits

No Prosecution

No Penalties

Confidentiality

Interest Reduction

Peace of Mind

CRA does not prosecute VDP applicants

There is no sinister "tax man" or "tax police" in dark glasses waiting to pounce on you and throw you in jail for tax evasion or not filing tax returns if you do a VDP Application. CRA does not prosecute VDP applicants. The purpose of the Canada tax amnesty program is to encourage Canadian taxpayers to voluntarily comply with their income tax obligations. Prosecution would be contrary to the goals of the VD program and contrary to the published guidelines (binding on CRA) that make it clear there will be no prosecution.

The latest published statistics shows that during 2012-2013, 71 income tax and GST/HST investigations were referred to the Public Prosecution Service of Canada (PPSC) for prosecution, compared to 120 cases in the previous year. As a result of referrals to the PPSC (current and previous years), 128 cases resulted in convictions for tax evasion or fraud in 2012-2013. 15,133 Voluntary Disclosures were processed in 2012-2013, while 14,624 Voluntary Disclosures were processed in 2013-2014.

These prosecutions were for taxpayers who were caught evading taxes, or who were sent requests and demands to file tax returns and ignored the demands. The prosecutions are NOT as a result of submitted VDP applications.

Income Tax Voluntary Disclosure Application

Procedures for Filing

Formal written retainer to ensure privilege and confidentiality

Voluntary Disclosure application submitted with basic information as soon as possible

We formally retain accountant on your behalf to maintain solicitor-client privilege

90 days to submit detailed information; apply for time extension if needed

Income Tax Voluntary Disclosure Application

Conditions to be met

Must be Initiated
by YOU

To qualify under the program, you must initiate the voluntary disclosure or Canada tax amnesty application. If CRA has begun audit or enforcement action, or has demanded that returns be filed, the disclosure is not considered to be voluntary and full penalties will be applied. A computer generated request for a return may not always disqualify you from benefiting from the program.

Must include
enough details

The disclosure must include enough details to allow all of the facts to be verified.

Pay the total amount
or
Make acceptable payment arrangements

After acceptance the taxpayer must pay the total amount of any taxes and interest owing at the time of disclosure, or make acceptable payment arrangements. Bankruptcy or a Consumer Proposal may be an option.

Income Tax Voluntary Disclosure Application

When Incomplete ?

If the disclosure is incomplete, the disclosed information will be considered to be voluntary. However, the taxpayer will be subject to civil penalties or prosecution relating to any substantial undisclosed amounts. You are only required to make your reasonable best efforts to supply all necessary information

Your Voluntary Disclosure Application

When is it Valid?

CRA determines that the disclosure is voluntary;

CRA determines that the disclosure is complete;

The disclosure involves a penalty; and

The disclosure must include information that is:

  • at least one year past due, or
  • if less than one year past due, not initiated simply to avoid the late filing or instalment penalties.

Tax Voluntary Disclosure Application

Timing

A voluntary disclosure (tax amnesty application) is effective from that time the we contact CRA on your behalf, even if detailed submissions are not made at that time. Therefore, for example, a taxpayer who has not filed tax returns for several years need not have them ready when first contacting CRA. Normally 90 days are provided to submit all necessary information. Extensions of time are usually granted for valid reasons such as difficulty in compiling the necessary information. The initial contact will be considered to be the date of the voluntary disclosure. The rules for a no-names disclosure are slightly different

Voluntarily Filing

Unfiled Tax Returns

A taxpayer who makes a voluntary disclosure or tax amnesty Canada application and voluntarily files unfiled returns will only be required to pay the tax owing on the reported income with interest. No late filing penalty will be charged.

Voluntarily Filing

Unreported Income

Where a taxpayer has failed to report income, including a failure to report foreign income including foreign pensions such as UK pensions or unreported offshore income or unreported online income (including unreported ebay income) and voluntarily reports it, only the tax owing on the unreported income plus interest (sometimes at a reduced rate) on it will be charged. The same is true where improper expenses have been claimed.

No-Names Disclosure

CRA allows us to approach them on your behalf without revealing your name to negotiate the terms of your voluntary disclosure. We have 60 days from the time we make the no-names disclosure to reveal your name. Once your identification is provided to them they will review their files to see if you qualify for the program. The no-names disclosure is sometimes helpful, and we use it in appropriate circumstances

Our Experience

David J. Rotfleisch, C. P. A. J.D. practices as a Tax and Business Lawyer, which guarantees solicitor-client privilege and absolute confidentiality, but also has his chartered professional accountant designation. He has over 30 years of professional experience and deals with voluntary disclosures on a daily basis. He deals with each file and personally reviews all tax returns before submitting them to CRA.

What Our Clients are Saying?

Don't wait until CRA Contacts you call 416-367-4222

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Contact us

  • Rotfleisch & Samulovitch Professional Corporation Barristers & Solicitors
    2822 Danforth Avenue
    Toronto, Ontario M4C 1M1
  • Phone: 416-367-4222
  • david@taxpage.com

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