This post will introduce you to the CRA’s Voluntary Disclosure Program and why it is important to consult with a tax lawyer. We will go over the principles underlying the VDP which guide the CRA’s decisions in any VDP application and why the outcome might not be what you expect.
The CRA’s Voluntary Disclosure Program (VDP) allows you to proactively correct a previously filed return or file a return which should have been filed. If you are eligible for relief under the VDP, you will be required to pay the taxes owing plus interest but, depending on the circumstances, you may be able to avoid penalties.
It is not recommended you apply for the Voluntary Disclosure Program on your own. Eligibility in the VDP is contingent on certain requirements and penalties may not be waived. A careful analysis of the incorrect or omitted information in the tax filing, including the timing, amount, owed, type of filing error, efforts to avoid detection, repeated offences, etc., should be conducted before you take any action.
A frank and open discussion with a a tax professional is required. This is also where a tax lawyer should be consulted over a regular accountant. Any discussion between you and a tax lawyer is protected under solicitor-client privilege. Communications between you and a lawyer is confidential and if the CRA ever decides to pursue a case against you, it will not be revealed to the CRA. This protection is not offered to any communications between you and an accountant. Contact us today to find out if the Voluntary Disclosure Program is right for you.