Information about the CRA voluntary disclosures

Posted by admin on March 4, 2015 in Income tax information |

Some useful information from CRA about your tax return

Did you know that there is a CRA voluntary disclosures program?

A second chance to correct your tax affairs

Second chances don’t often happen in life. But if you have ever made a tax mistake or left out details about income on your tax return, the Canada Revenue Agency (CRA) is offering you a second chance. The Voluntary Disclosures Program (VDP) gives you the opportunity to come forward, make things right, and have peace of mind.

The vast majority of Canadians pay their taxes in full. Those tax dollars mean we all benefit from government-funded services and programs that make our lives better. More and more Canadians are coming forward to correct their tax affairs. Why don’t you?

How do I make a voluntary disclosure and where do I send it?

Filing a valid voluntary disclosure with the CRA means you would pay only the taxes you owe plus interest, and you may avoid penalties and potential prosecution on the information accepted under the program. You can file a disclosure to correct inaccurate or incomplete information or to provide information you may have omitted in your previous dealings with the CRA.

Fill out and sign Form RC199, Voluntary Disclosures Program (VDP) Taxpayer Agreement, or send a letter giving the same information as on the form to one of the following CRA tax centres:

If you are a resident of, or your principal place of business (for corporations) is in, the Atlantic provinces, Quebec, Ontario, Manitoba, Saskatchewan or Alberta (the Prairie Region), Nunavut or the Northwest Territories, please send your disclosure submission to:
The Voluntary Disclosures Program
Shawinigan-Sud Tax Centre
4695 12e Avenue
Shawinigan QC  G9P 5H9
Fax: 1-888-452-8994

If you are a resident of, or your principal place of business (for corporations) is, British Columbia (the Pacific Region), or Yukon please send your disclosure submissions to:
The Voluntary Disclosures Program
Surrey Tax Centre
9755 King George Boulevard
Surrey BC  V3T 5E1
Fax: 604-951-5691

If you are a non-resident, please send your disclosure submission to either:
The Voluntary Disclosures Program
Shawinigan-Sud Tax Centre
4695 12e Avenue
Shawinigan QC G9P 5H9
Fax: 1-888-452-8994
The Voluntary Disclosures Program
Surrey Tax Centre
9755 King George Boulevard
Surrey BC V3T 5E1
Fax: 604-951-5691

What are the conditions for a valid CRA voluntary disclosure?

A valid disclosure must meet all of the following four conditions:

  • your disclosure is voluntary (made before you become aware of any compliance action taken by the CRA against you);
  • a penalty applies to it;
  • the information is at least one year overdue; and
  • the information is complete.

See Information Circular IC00-1R4, Voluntary Disclosures Program, for more information.

What is accepted and not accepted under the VDP?

The following are circumstances under which VDP relief may be granted:

  • you did not fulfill your obligations under the applicable act;
  • you did not report taxable income you received;
  • you claimed ineligible expenses on your tax return;
  • you did not remit your employees’ source deductions;
  • you did not report an amount of GST/HST (which may include undisclosed liabilities or improperly claimed refunds or rebates or unpaid tax or net tax from a previous reporting period);
  • you did not file information returns; or
  • you did not report foreign-sourced income that is taxable in Canada.

Disclosures relating to any of the following are not accepted under the VDP:

  • bankruptcy returns;
  • income tax returns with no taxes owing or with refunds expected;
  • elections;
  • advance pricing arrangements;
  • rollover provisions; and
  • post-assessment requests for penalty and interest relief.

Can I make an anonymous disclosure?

You can make an anonymous CRA voluntary disclosure. This is also referred to as a “no-name” disclosure. You will have 90 calendar days to provide the identity of the taxpayer involved.

This 90-day period will not begin on the date you send in your original disclosure, but rather on the date the CRA sends you a letter telling you that the 90-day count has begun. You must provide the identity of the taxpayer on or before the 90th day or the CRA will close the disclosure file without further contact.

What should I expect after I make my disclosure?

The CRA will send you an acknowledgment letter after it receives your disclosure submission. This letter is normally sent within two weeks and will include information about the next steps in the process.

You can Learn more about your disclosure by clicking this link.

When should I pay what I owe?

You need to pay any tax and interest due as soon as you make your disclosure. Otherwise, interest will continue to accrue on any amount outstanding until the CRA receives full payment.

Don’t wait! Go to the make a payment page to learn more about your payment options.

Myth vs. fact about voluntary disclosures.

Myth: Only individuals can make a disclosure.
Fact: Any taxpayer can make a disclosure. The term taxpayer includes an individual, an employer, a corporation, a partnership, a trust, a goods and services tax/harmonized sales tax (GST/HST) registrant/claimant, and a registered exporter of softwood lumber products. You can also have an authorized representative make a disclosure for you.

Myth: The VDP will limit its review to 10 years’ worth of information.
Fact: There is no limit on how far back the VDP will request or review information. A disclosure must be complete and provide all the relevant information to allow the VDP officer to appropriately review and decide whether statute-barred years should be opened for reassessment. Income will be assessed in the year it is earned. If you have not filed for several years (that is, you are a non‑filer), you are expected to update all your tax years. For more information on the 10-year limitation policy, please see Information Circular IC00-1R4 – Voluntary Disclosures Program.

Myth: I can make a disclosure through the VDP as many times as I want.
Fact: You are expected to keep your affairs up to date after using the VDP. You cannot make a second submission for the same issue for which you originally received the benefits of the program.

However, the CRA will consider a second disclosure in situations where the circumstances were beyond your control. In this case, you must give your name and tell the CRA that you previously made a disclosure. If you do not reveal that you previously made a disclosure and this is uncovered by the CRA, your disclosure may be considered invalid and denied.

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