As the Canada Revenue Agency (CRA) moves forward to aggressively address non-compliance on unreported income or unfiled taxes, it becomes more important that you need to be aware of the Voluntary Disclosures Programs (VDP)
The Income Tax Act allows the CRA to assess you penalties of up to 50% of the unpaid tax or the improperly claimed benefits. In addition, the court may, on summary of conviction, fine you 50% to 200% of the tax evaded, and even a jail term.
As soon as CRA initiates the contact, then it is too late. It could be one letter in the mail, one phone call, one personal visit, etc. Your life could change for the worst in a moment.
The Tax Mechanic is qualified and has the experience to help you solve tax problems. Many people try to handle their tax problems themselves, resulting in negative results because they do not understand the complex Voluntary Disclosure well. Keep in mind the Voluntary Disclosure Program (VDP) is more than just a form to fill out.
We have helped clients in reducing their tax damage by utilizing the voluntary disclosure program (VDP) and negotiating a fair settlement.
At the Tax Mechanic, our professionals deal with the CRA every day and can present your case to the CRA on its own merits, with full knowledge of all the rules and regulations.
Joe was 10 years behind on a small business he started and each passing year his stress level continued to grow. Not filing was not what he wanted to do, but for whatever reason when it came time to file he didn’t and another year went by. Finally being close to retirement, and having other financial matters that were starting to impact his life, it was becoming clear that not filing was not the answer. If CRA ever tracked him down his life would change for the worst. We were not only able to help him but in the end it cost him very little. He was extremely happy to put this behind him.
Find out for yourself by giving us a call and arranging a free 30 minute consultation.
The Voluntary Disclosure Program is a program instituted by Revenue Canada. It’s for those people who are behind on reporting their taxes. You can work with them through the problem and tell them you want to make a voluntary disclosure. If you use me, you don’t even have to give your name. All you have to do is get a representative like me, and they will get a number for you. Now you will be registered with them. Even if they send you a letter in the next week, you will not pay penalties because you already contacted them first. That’s why this is a time-sensitive process. It comes down to who contacts who first. So, one quick call to me and your penalties will get waived. But if you let them contact you first, then you’re into a penalty situation which is just a nightmare. The reason they put this program together is they want taxpayers to become compliant. They know that this can be a hard situation. They don’t want to put taxpayers into hardship. So they say, “Listen, if you come to us first, and file your tax returns, make a payment arrangement or pay your taxes, we won’t assess penalties.
But if we must track you down, if we catch you some other way, you are going to pay penalties and interest.” Let’s say you sold a condo and Revenue Canada finds out about it from the vendor. If you’ve been avoiding them and they catch you, they will assess you a penalty. The penalty is quite Draconian. It’s usually equal to the tax that you owe. So if you owe $50,000 in tax and feel like you can get around this and keep going on, well, what if they catch you? If they catch you, now that $50,000 problem becomes a $100,000 problem plus interest, which is usually another $50,000. So now you’ve tripled your problem from $50,000 to $150,000, when all you had to do was pick up the phone and call me, and within half an hour, that problem would have been solved.
Timing is very crucial. What I recommend that people do, if they have a problem, is to call us right away; I’ll give them a half-hour free consultation. I’ll assess what I think they owe in tax based on numbers they give to me generally over the phone. If they’re in agreement, they don’t even have to engage me; I can call Revenue Canada on their behalf, and make a voluntary disclosure, which means that the taxpayer remain anonymous. Revenue Canada will then give me a number. I’ve got a number associated with this taxpayer, and I’m a representative with Revenue Canada, so they abide by my authority to associate a taxpayer who wants to make a voluntary disclosure. So they can call me, they get the voluntary disclosure number, and then they can go to somebody else if they want to. It doesn’t matter, they can do it themselves if they want to. But at least stop the penalty assessment, and then you’ve got the process started.