A few months ago we reported on the most recent report on the Canada Revenue Agency’s Voluntary Disclosure Program. This week, with the tax filing deadline just weeks away, we thought we’d revisit this issue in the hopes of offering those of you fearful of a tax audit some assistance. While CRA debt forgiveness is just not a reality, you may be able to achieve relief from penalties and interest if you act quickly.
Back in December, after months of investigation and review, the Canada Revenue Agency released its “Report on the Voluntary Disclosures Program”, outlining suggestions based on those findings. As we told you back in December, this report included recommendations made by the advisory committee regarding several changes, including, as noted, stricter treatment of those who’ve knowingly cheated the system. Another recommendation suggested the CRA take measures to force those taking advantage of the program “to provide information on any accountant or adviser who helped them to engage in tax evasion or avoidance, to find other taxpayers who may have broken the rules.”
The Voluntary Disclosure Program has long been an avenue for Canadians to become compliant, disclosing information previously not included in income tax filings. The program often allowed those coming forward to avoid paying interest and penalties and avoid prosecution in exchange for the payment of any debts owed.
However, new regulations are making this more difficult. The committee further suggested that the CRA should avoid approving VDP applications too quickly, and instead should investigate further into each file. The committee noted that with each VDP case there is potential for those applying to still be hiding large amounts of unreported income with no intention of declaring it and that being too lenient will cause the taxes on that undeclared income to be missed.
Don’t think you’re at risk? You might want to think again. The release of this report came just after another announcement made by the government stating that the CRA was to receive a major injection of funds to uncover those cases of offshore holdings and tax havens – something that seems ever more crucial for the government after the whole Panama Papers debacle last April.
While we urge you to recognize that CRA debt forgiveness is a pipedream, and that the Voluntary Disclosure Program is becoming more difficult, we are not suggesting that you should not at least consider it as an option. It’s actually the exact opposite. These new regulations are in their infancy, and thus your timeline for applying is growing shorter by the day. Applying right away may be your best chance to take advantage of the program as it currently exists, before more changes are put in place.
Want to get started? Call Tax Solutions Canada today at 1 888-868-1400.