There are many factors to consider when filing multiple years’ tax returns and/or declaring unclaimed income. The most important is timing. If you contact the CRA and put them on notice that you will file up to date it could save you a significant penalty. However, if the CRA sends you a letter requesting compliance then you forfeit your right to voluntary disclosure and subject yourself to a negligence penalty which is equivalent to the tax you owe. Therefore doubling the amount you have to pay. Contact us and we will notify the CRA of your intention to comply and avoid the negligence penalty. One phone call and your problem is solved.
Noncompliance Affects Others
Unfiled tax returns will affect spouses or common‐law partners, business partners and customers. CRA likes group audits and may assume that there are likely others in family or business groups who are noncompliant.
CRA Will Proceed Against You
Once CRA discovers unfiled tax returns and is not satisfied with communication outcomes they often get attention by issuing notional (estimated) assessments (tax bills).
It bears repeating ‐ transferring assets to non-arm’s‐length parties will create jeopardy for the people who have received assets from you for what CRA will assume are for purposes of tax payment avoidance.
Financial institutions and many organizations that provide financial assistance almost always insist on the notice of assessment of corporate or personal tax returns to validate income for the purposes of debt repayment ability or qualification for program payments.
Noncompliance Affects Other Areas
CPP benefits, old age security payments, spouse transfers and tax elections, student loans, GST/HST and child tax benefits will be reduced or eliminated.
Severe, Debilitating Costs
The cost of tax owing increases relentlessly with the application of negligence penalties, late filing penalties, interest on unpaid installments, interest on unpaid taxes, and interest on penalties.
Let’s talk! We’ll find out important information about your specific tax issues. We will then connect you with the right tax specialist to offer the best tax relief solutions.
COMMUNICATE WITH THE CRA
The professional tax debt specialists in our network will speak with the IRS on your behalf. They will deal with your IRS collection calls.
The tax specialist will perform aggressive negotiations with the IRS to reach a settlement that’s within your financial means. Whether you owe Federal or State taxes, they can help.
1. Use their computer technology to data mine information in search of non‐filers. This includes their matching program (T ‐ slips and other reports by third parties such as subcontractors and domestic and international financial institutions).
2. Assess penalties in almost every instance of noncompliance. Late filing penalties are automatic and punitive if repeated noncompliance occurs.
3. Issue assessments based on the information they have available. They will not likely consider as relevant any good reasons you think you have for non-filing.
4. Assess you or your company for not charging GST/HST once annual income for any year is over $30,000. GST/HST issues will also be relevant if you are self‐ employed and, even if you have no GST number.
5. Expect you to remain current with present and future tax filings and tax Their policy seems to be that current tax debt is very important and payment on that is a lot less negotiable than tax debt in arrears.
CRA’s special Voluntary Disclosure (VD) program does not provide 100% certainty that the use of Voluntary Disclosure is going to have the outcome you wish.
The VD program should always be considered and is useful regarding reduction of penalties and its relief provisions.
The bottom line is that the answer to, “should I apply for VD?” is, “it depends”.
Give yourself the best chance and consult an experienced lawyer (legal privilege) who understands CRA’s latest practices on VD. The Tax Mechanic works closely with a legal firm that is particularly helpful and experienced with VD and many other tax issues.