National Post (National Edition)
Coming clean with the taxman is about to get tougher
ITax Expert f you’ve ever omitted some income from your tax return or perhaps claimed expenses that you knew were not entirely legit, you may be interested in proposed changes announced last week to the Canada Revenue Agency’s Voluntary Disclosure Program (VDP). The VDP allows taxpayers to voluntarily come forward and correct previous tax filing errors without penalty or fear of prosecution. The tax would still be owing, along with either some (or all) of the arrears interest.
The proposed changes to the VDP can be traced back to October 2016, when the House of Commons Standing Committee on Finance, in its report to the government, recommended that the CRA undertake a comprehensive review of the VDP. In December 2016, the Offshore Compliance Advisory Committee (OCAC), an independent committee composed of tax experts, presented its Report on the Voluntary Disclosures Program to the CRA, along with recommendations on how to improve the VDP so that it could be made “more effective and more fair.” The OCAC recommended that the VDP be continued but proposed tightening the criteria to be accepted into the program.
The CRA has recently completed its review of the VDP and issued a draft of newly-updated “Information Circular — IC00-1R6 — Voluntary Disclosures Program.” It also announced a 60-day online consultation period where Canadians can provide their input on the proposed changes to the VDP. The CRA will review the input received and is expected to announce formal changes to the VDP in the fall of 2017. Any changes would be effective Jan. 1, 2018.