CRA’s voluntary disclosure program (VDP) permits taxpayers to include past omissions in their tax returns in order to attain compliance with the Income Tax Act (‘ITA?. Taxpayers can make disclosures to correct inaccurate or incomplete information. For example, clients may not have met their tax or duty obligations if they claimed ineligible expenses, failed to remit source deductions or the GST, or did not file the correct customs accounting information. Taxpayers who make a valid voluntary disclosure will have to pay the taxes owing, plus interest. This provides relief from penalties and prosecution otherwise imposed for such acts.

 What conditions must be met to make a voluntary disclosure?

A valid voluntary disclosure is defined by four conditions:

• CRA determines that the disclosure is voluntary.  The taxpayer him/herself must have initiated the voluntary disclosure. A disclosure may not qualify as voluntary if it is found to have been made with the knowledge of an audit, investigation, or other enforcement action that has been initiated by CRA.

• CRA determines that the disclosure is complete. The taxpayer must provide full and accurate reporting of all previously inaccurate, incomplete, or unreported information.  Minor errors and omissions will not disqualify a disclosure, however, disclosures which contain material errors or omissions will be processed and interest and penalties applied to the entire amount.

• The disclosure involves a penalty.  A disclosure must involve at least one penalty.  If no penalties apply to the information being disclosed, the client does not need to seek penalty relief through the VDP.

• The disclosure must include information that is:

o       At least one year past due, or

o       If less than one year past due, not initiated simply to avoid the late filing or instalment penalties

How do I make a valid disclosure?

Simple. Stephen Du, an experienced lawyer holding an accounting degree and partner of Du Markowitz LLP, will process your claim from start to finish, ensuring full compliance including the above conditions. We also offer a full-service tax program to get your maximum entitlement from CRA.