All About Estates

Voluntary disclosures – changes are coming!

Last week I met a couple who came in to see me for help with missed tax filings.  They were both aware of the potential for tax penalties and related interest on overdue tax and contemplated “leaving sleeping dogs lie”.  When asked how well they sleep at night, their response was “…not well”.  I said to them there may be an alternative solution.

The Canada Revenue Agency (CRA) Voluntary Disclosures Program (VDP) gives you a second chance to change a tax return you previously filed or to file a return that you should have filed.  You can apply to the CRA to ask for relief of prosecution and penalties. You are still required to pay any tax and interest that you owe.  The program is available to any taxpayer – individual, partnership, corporation etc.  Once you use the program, the CRA expects you to keep your taxes up to date. The CRA may consider reviewing your file a second time in situations where the circumstances are beyond your control.

The CRA recently released highly anticipated proposed changes to the VDP that would narrow its application and offer less generous relief or, in some cases, no relief, to non-compliant taxpayers.  The CRA is seeking input on the proposed changes during a 60-day online consultation period ending early August 2017.  The final changes to the VDP policy will be announced in the fall and will apply as of 1 January 2018.

If you or someone you know wishes to complete their overdue or deficient tax filing(s) before 2018 then please contact a tax advisor.

 

Derek A. de Gannes: Senior Director, Private Client Services of RSM Canada. RSM Canada is committed to the highest level of integrity, quality and professionalism and provides clients with solutions in the area of Audit, Tax and Transaction Services. Email: derek.degannes@rsmcanada.com

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