Tag Archives: CRA VDP

Making the Most Of The VDP

Knowing that there could be a solution to your tax problems will make life seem a lot better. If you are having trouble paying off all of your tax bills, then there is the Voluntary Disclosure Program – otherwise known as the VDP – that is there to help you. It is not the easiest process to follow and as a result you will be better off not going through the process on your own. You can take a lot of the stress and strain out of it by working with someone who has experience in this area, and will be able to guide you.

You need to be well organized, as with the VDP you need to have a lot of paperwork to submit and which disclosure you go for will determine which papers you need. Again it is going to be the professional who lets you know what you need and what is not going to be looked at.

You could find that you need the VDP for a number of reasons and it could be something as simple as not having filed your return on time, or not having filed it properly. You may not realize at the time that this is going to cause you a lot of problems, but as soon as you are contacted by the CRA they will make sure you know as they will tell you they need payment and that there are sanctions that they can pass making life quite uncomfortable. It is for this reason that there are companies who can help and let you know if a VDP or other program will be best.

If you are wondering what the benefits will be if you get involved in the VDP compared with going it alone and just trying to pay the bill off, then think of the advantages of not having to pay back all of the penalties you have picked up. Once you have the bill and know what the CRA are expecting from you, then you will be able to determine what you gain from the VDP. There will not be many times in your life when you are given a second chance and allowed to save money that you owe, so when this option is presented to you, take the offer seriously and don’t let it slip away. There are serious savings to be made so it is important you play the game properly and allow the experts to make offers and push the VDP process forward.

If you are concerned that this is not legitimate and there is no way that the CRA will allow you to pay less than you owe, then read up on the VDP and you will find out that it is a negotiated repayment system and it is for this reason that you are advised to employ someone with experience to guide you through. It is not all a one way system and you will have to agree to certain conditions, but it is still going to lead to you making substantial savings.

Taking Part In The Canadian Voluntary Disclosure Program

It is easy to make a mistake if you fill in your tax return without professional help. It could be that you misinterpret what needs to be done, or just don’t put the figures in the right place. In Canada, the Canadian Voluntary Disclosure Program allows residents to contact the CRA and let them know about incorrect or inaccurate information that has previously been submitted. The sort of information that is allowed, will be details that has been incorrectly reported, or that was missed of the disclosure completely.

The Canadian Voluntary Disclosure Program is something that is open to any taxpayer, and this can be a business as well as a individual. It does not matter if you are a Canadian resident or not, an employer or employee and if you prefer, you can authorize someone to put in the disclosure for you. It is at times like this that there should be someone helping you. Had you employed professional help at the beginning, you may not be in this position, but at least you are getting the chance to put things right.

There are many things that you can disclose as part of the Canadian Voluntary Disclosure Program, and the areas that will be relevant to you will depend on the nature of you employment. It can be late-filed information returns (e.g. T4, NR4, T4A-NR, T106, T1135, T1134), or GST/HST omissions, unreported source deductions, expenses that should not have been claimed, business income or unreported personal, from sources inside or outside of Canada and late-filed income tax (for example T1, T2) returns. This is not the full list, but will be appropriate for many returns.

If you are unsure as to whether or not you should take part in the Canadian Voluntary Disclosure Program, it is worth remembering that doing so could prevent you incurring penalties and even being prosecuted. You would need to pay the tax that you omitted paying previously but this is to be expected.

Before filling in the disclosure it is worth checking with your representative that you have all the information needed. There are a number of reasons for filling in this disclosure – not least the fact that it can stop prosecution. You must start the process before you are informed that there are queries being raised regarding your form, and it will relate to returns that are more than 12 months old. If you do not a full and detailed submission in relation to the Canadian Voluntary Disclosure Program, your application for a disclosure can be refused.

If you are taking advantage of professional help, they will know where to send it, and it will include the need for you to fill in Form RC199, or provide the information in your own words. They will have to include Form T1013, Authorizing or Cancelling any Representative, or Form RC59, and they must be signed. They will then send it to the relevant tax office dealing with the Canadian Voluntary Disclosure Program.

You will be notified of the next stages after about few weeks, and it is possible you will be asked for more information and this will be expected within 30 days of request. Next you will be informed as to whether the disclosure as part of the Canadian Voluntary Disclosure Program has been accepted or not.

The Taxpayer and the Voluntary Disclosure

When a taxpayer feels that the filing of the tax return was not so accurate, there are bound to be fears concerning possibilities of a CRA audit and assessment. This will also be the case for those employers who have not remitted their Sales Taxes or their payroll deductions. It will be a nightmare of suspense for an individual who has not bothered to disclose the earnings from abroad. All such people should actually thank the CRA for implementing the Voluntary Disclosure program.

Now, a taxpayer can rectify inaccurate or insufficient filing of tax returns without being afraid of penalties or prosecution. Voluntary disclosure allows these taxpayers to prepare and then assess the outcome of their disclosure. They can do this either on a named or even on an anonymous basis.

In the case of a named voluntary disclosure, the taxpayer will have to provide a Form RC 199 or a Taxpayer’s Agreement Form, along with the full postal code and other contact details that include the Social Insurance Number. In the case of an anonymous voluntary disclosure, the taxpayer will have to disclose only the first three digits of the postal code and the contact information of its representative, the gender and age of the individual, the taxation years and the reporting periods that are going to be involved in the voluntary disclosure. Other things that have to be disclosed are the amount of the correction in taxes, the type of the return which is involved, the type and the reasons for their earlier omission, the principal business activity of the submitter and how he or she will be able to meet the conditions of use set by the CRA.

There are several benefits to using the voluntary disclosure program. The principal one being the way it provides the taxpayers a safe method, relatively speaking, of rectifying the deficiencies in their previous tax return filings. The other biggest benefit is the prevention of the enforcement procedures special investigations into your financial affairs. The CRA will not take any action against the taxpayer if he or she discloses before an investigation notice of assessment or an audit is initiated. The taxpayers have to be aware that the consequences of a criminal prosecution can lead to a jail time of one year per charge along with penalties that may range anywhere from a thousand to twenty five thousand dollars. Many taxpayers have lost sleep and have suffered emotional stress from this burden.

People who avoid thinking about voluntary disclosure have to be aware that the penalty for late filing on the first offence is five per cent of the balance of the taxes that is outstanding and one per cent for every month that the balance will remain outstanding to a maximum period of one year. For any additional offence, the penalty goes up to ten per cent of the balance which is outstanding and two per cent for every month to a maximum period of twenty months. Interest is also added to the principal amount and it is charged in the next month.

Tax 911 Now and Tax Amnesty

Falling behind on your taxes is never desirable. However, sometimes there isn’t much you can do about it. Whether you forget to file or you just don’t have the money to pay the taxes, eventually you might lag behind and, without notice, the government can come knocking on your door. Nobody wants to deal with the government and taxes, but if you are behind, that is exactly what is going to happen. Before the government comes calling for the taxes, it is time to give us a call. At Tax 911 Now, we are able to work with you and the government in order to negotiate through tax amnesty program that can control the damage from tax trouble. A tax amnesty is something that is going to drastically help you reduce the amount of money you have to pay.

What is Tax Amnesty?

When it comes to under-reported taxes or falling behind, there is generally a limited window of opportunity for taxpayers to be able to apply for the tax amnesty program to avoid prosecution, get penalties waived and even have interests reduced. With the help of a professional tax team like we have at Tax 911 Now, the government brings down the amount taxpayers may owe. There are different circumstances that bring about the tax amnesty, with our help, you can find out if you qualify and if it is something that is suitable for you to go through.

What are the Benefits?

There are several benefits of tax amnesty. For starters, you do not have to pay the penalties amount that you normally would. On top of this, you do not have to worry about criminal prosecution, the interests may not be as big when paying the amount back. This way, you only have to pay the set amount back determined by the tax amnesty and no more. This is, of course, as long as you are honest with your tax information. If you make false or incomplete claim, CRA may come back later to audit, you might run into more serious tax issues.

Contact Tax 911 Now before CRA contacts you. Keep in mind, to qualify for the tax amnesty, you need to voluntarily disclose your tax issues. If CRA sends a letter or makes a call to you, then it is too late. You will have no choice but to face heavy penalties, or worse, prosecution. Call us at 1-877-918-2991 Today before it is too late!