Acceptance into the Voluntary Disclosure Program
There are a number of situations that would lead to someone being accepted into the Voluntary Disclosure program. The program applies to people:
- who have not filed their personal tax return, trust return or corporate tax return or who have failed to report income. This includes foreign pension income that was never reported.
- who have not filed GST returns. Input tax credits may be claimed after four years for those who did not remit source deductions for employees.
- who have filed, but whose return includes mistakes or inaccuracies, for example, claiming too much in expenses.
- who have made fraudulent claims.
Other situations that might apply include people not reportinig income earned off-shore or from a cash basis. In situations like these, the chartered accountant may use a “No-Name” disclosure which allows the taxpayer to keep their identity unknown to the Canada Revenue Agency for 90 days without prosecution while the information is being submitted to the government. The taxpayer can correct any mistakes and submit a complete disclosure without interference from the government. After 90 days, the file is considered closed.
Overall, the system works well because it benefits everyone and it is not adversarial. There is a 10-year limit on eligibility for the Voluntary Disclosure program but the key is that the taxpayer must apply for amnesty before the government starts investigating for tax irregularities.
