To encourage taxpayers to come forward, Canada Revenue Agency will often waive the penalties associated with late filing your tax return, not including all of your income in your tax returns or claiming ineligible expenses if you make a voluntary disclosure. You will still be charged interest and will have to pay any tax owing, but you may be able to avoid significant penalty charges. To qualify you must meet a number of criteria:
- You must initiate the contact with Canada Revenue Agency.
- There must be sufficient and complete information for the years under question.
- The CRA must be in a position to apply some type of penalty. The information being disclosed must be at least one year past due or less than one year past due where the disclosure is to correct a previously filed return.
If you decide to make use of the Voluntary Disclosure Program, you must make a written submission outlining the relevant details. If your submission is accepted, then you must pay the outstanding tax and interest amount or work out acceptable payment terms.