Frequently Asked Questions
Are Tax Amnesty and the Voluntary Disclosure Program the same?
Yes.
Does the government have a tax amnesty or tax pardon program?
Yes. Canada Revenue’s tax amnesty or tax pardon program is called the Voluntary Disclosure Program. This program allows people with unpaid taxes who are not under investigation or being audited to pay the money owing with interest but without penalty or prosecution. A qualified tax accountant can register you for the Voluntary Disclosure Program during your first consultation. People who have not filed their taxes or who have cheated on their taxes for a number of years think about their situation all of the time. This is on their mind all of the time and they lose sleep over their situation constantly. By coming forward with a voluntary disclosure with CRA, their problem will be solved and they will have peace of mind. When new clients come into our office, we file the disclosure in the first meeting. This provides some peace of mind to the client and the taxpayer has 90 days to complete all submissions to CRA.
I haven’t paid my taxes for a few years. Can I qualify for tax amnesty?
You can qualify for the tax pardon or Voluntary Disclosure Program if you are not being audited and are not under investigation by Canada Revenue. If your spouse is being audited or a company that you own, then it is too late.
Do you need a lawyer to file the voluntary disclosure?
You do not need a lawyer to file the voluntary disclosure. If the accountant has never met you before and has no knowledge of your business then he has no information that can be used against you. The accountant cannot be used as a witness against you, because he does not know you or your activities prior to the first meeting. Once the accountant meets the client, then all information must be disclosed to the accountant and therefore the taxpayer has fully disclosed everything to CRA. Not only can we file your voluntary disclosure with CRA just as a lawyer does, but we can prepare all of the tax returns that are outstanding along with any adjustment that are required. Most lawyers will simply prepare the voluntary disclosure. We will prepare everything.
I haven’t paid my taxes for several years and the government has frozen my bank account. What do I do?
You will need to contact a collections officer at Canada Revenue Agency right away to tell them that you are going to do something about your taxes owing. You also need to contact a qualified tax accountant to help you prepare the tax returns for the years that are owing to make sure that you are only paying the amount that you should. Canada Revenue bases your debt on what they assume you have earned during the years you have not paid. They do not know what deductions might be able to be put against those earnings to decrease the amount owing.
The government has garnisheed my wages because I haven’t paid my taxes. What do I do?
You need to call a Canada Revenue collections officer as soon as possible. He or she will explain what has happened to your file and tell you the amount of money that you owe the government in taxes and penalties. A qualified tax accountant can then work with you to complete the tax returns for the years that you have not paid to make sure that all your deductions are applied for and that you pay the government the correct amount.
What can happen if I don’t pay my taxes?
Canada Revenue can freeze your bank account, garnish your wages, garnish your receivables if you are a company, and put a lien on your property. They can also prosecute you through the courts and you could go to jail.
What do I do if the government has put a lien on my property for taxes I haven’t paid?
You need to immediately contact a collections officer and make arrangements to pay the taxes you owe. A tax accountant can help you prepare the detailed reports you need to help you calculate the taxes owing, so that you are paying no more than you should plus your accumulated interest and penalties. Usually, liens are put on a property if CRA is completely ignored by the taxpayer. The taxpayer ignores phone calls, letters etc. If the collection officer is communicated with, then payment arrangements can be made.
What does it mean to file a no-name voluntary disclosure?
A no-name disclosure allows the tax payer to file for voluntary disclosure without revealing his or her name. The tax payer then has 90 days to prepare the information the government needs to avoid prosecution.The file is considered closed after 90 days. If you do not file the voluntary disclosure within the 90 days, you are not allowed to re-apply even though you applied under a no name basis.
What is the Voluntary Disclosure Program?
This is a Canada Revenue Program designed to help people get their taxes paid up and get back in the system after not filing tax returns or filing incorrect tax returns for several years. The program allows tax payers to make up the unpaid taxes plus interest, but waives most of the penalties and any threat of prosecution. You can apply through a qualified tax accountant who can then help you get your taxes in order for the years you did not submit returns. The voluntary disclosure program is a one time gift from the Canada Revenue Agency. You cannot apply under the voluntary disclosure program a second time unless there is an extraordinary circumstance that is beyond your control.