Voluntary Disclosure Program (VDP) Questions
The Voluntary Disclosure Program can be a great opportunity to correct previous errors without having penalties assessed against you. With ex-CRAs professionals, Farber Tax Solutions can handle the CRA on your behalf.
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What is the Voluntary Disclosure Program (VDP)?
If you have forgotten to file your tax returns for a previous year, or just recently found out that you made an error on a previous return, you may have a remedy with the Voluntary Disclosure Program.
Under subsection 220(3.1) of the Income Tax Act, you can bring the error to the CRA’s attention under the Voluntary Disclosure Program. In return, the CRA may decide to grant you relief on penalties and interest that would have otherwise been assessed against you.
In order to qualify for the program, you must meet four requirements.
First, the disclosure must be voluntary. If the CRA has already arbitrarily assessed you for a year where you did not file your taxes, or applied a penalty against an error you made, you will not qualify for the program. Likewise, if the CRA has already pursued action on the issue against you or a related party, like a business partner or your corporation, you may not qualify.
Second, the disclosure must be complete. The information you give to the CRA must be accurate, and you must identify and correct all the errors you made previously.
Third, you may only qualify for voluntary disclosure if there is a penalty involved, such as a late filing penalty or a gross negligence penalty. If you have not filed your taxes for a previous year, or you have a made an error on a previous return, you likely qualify for the program.
Finally, the disclosure must contain information that is at least one year past due. For example, you cannot use voluntary disclosure to file a return alone for the previous year. However, if you were to use voluntary disclosure to file returns for multiple years, the CRA would consider waiving penalties and interest for all of the years you filed.
The Voluntary Disclosure Program can be a great opportunity to correct previous errors without having penalties assessed against you. However, it is important to make sure that you qualify for the program and to be careful about what information you submit to CRA. If you believe that you could qualify, or would like to submit a request to the CRA, please contact us today and we can assist you with that process.
Farber Tax Solutions can help you successfully deal with CRA problems. We utilize the experience of our tax experts to:
- 1| Offer a comprehensive solution that is focused on achieving the most favourable possible outcome for your tax issue;
- 2| Communicate with the CRA on your behalf and navigate the entire CRA dispute process; and
- 3| Offer a complete solution to your tax problems, including ex-CRA professionals and tax lawyers from Farber Tax Law.