Some taxpayers may become very fearful at the thought of having to reopen a filing or make revisions to file back taxes with the CRA (Canada Revenue Agency). But CRA’s Voluntary Disclosure Program (VDP) can benefit someone in this circumstance.
The Voluntary Tax Program is worth taking benefit of if you know that you’re going to owe taxes & penalties will be appraised. But it is essential that you meet all 5 conditions set by Canada Revenue Agency to be eligible.
The Voluntary Disclosure Program isn’t part of the Income Tax Act but merely a compliance measure approved by parliament to provide CRA unrestricted powers over the upshot of your disclosure.
The 5 conditions that must be met under the Voluntary Disclosure Program criteria are compulsory to use the program. To file under the VDP, you must meet all conditions:
• The disclosure must be voluntary. If Canada Revenue Agency asks you for information or requests a filing before you choose to use Voluntary Disclosure Program, you no more have a voluntary status, and no longer be eligible for the program.
• Your disclosure must be complete. Include all the info for all periods being amended. You should leave nothing out.
• A penalty must be involved. In other words, if after looking at a draft of the info you wish to reveal, you find that you owe no taxes or penalties are not likely to be appraised, the Voluntary Disclosure Program may not be fit you.
• The information or return must be more than a year old to be eligible. The Voluntary Disclosure Program doesn’t apply to current filings.
• You must attach a payment, or request for installments
Do I need to appoint an accountant or an attorney for the VDP application?
If you have a straight forward case of error or omission, and the dollar amounts aren’t huge, you don’t necessarily need to hire an accountant or lawyer for the VDP application. You can file your own! However, if there’re noteworthy non-compliance & significant amounts of taxes, you must take help of an accountant or a lawyer. Nevertheless, hiring a pro accountant ads an extra layer of security and comfort that your Voluntary Disclosure Program application is complete. Just keep in mind that VDP is your one-time chance to correct the compliance. If your VDP application is rejected, you wont have protection from gross negligence penalties and/or criminal prosecution since you have already provided the disclosure.
Maroof HS CPA Professional Corporation, we can help in the preparation of all the required returns, required workings and voluntary disclosure application to assure higher accuracy.