When there is a situation where you have to take up the tax amnesty offer provided by the CRA, it is advisable to seek expert professional advice on these tax matters. Tax amnesty offers a second chance to the Canadian residents who have not filed their taxes regularly and are feeling nervous about it. After all, it can be deemed as a criminal offence if you do not file your tax returns.
Many taxpayers, whether they are individuals or business corporations, have a cause to worry if there are any unfiled tax returns or cases of income which have not been reported accurately. There may have been cases of overstated expenses too. There is a tendency that if a taxpayer does not file an income tax return for any single year, he or she try to hide while filing subsequent returns of taxes. They are scared of the possible consequences and the reaction from CRA.
The tax system in Canada is self-assessment based. It means that the residents are required by law to file their income tax returns and also include all their sources of income that involve foreign earnings or other offshore income. As the system is rather complicated, many taxpayers evade from reporting deliberately.
Taking the tax amnesty route is a possible way for the taxpayers to declare by coming forward all their tax returns which they had not filed earlier. There are few tax firms in Canada that specialize in handling tax amnesty and voluntary disclosure program. They deal with the CRA to prepare tax returns and to file for tax amnesty for their clientele.
Any taxpayer who has not filed his or her income tax returns or not filed GST returns can take advantage of the CRA’s tax amnesty offers. This stands true in cases of income which has not been reported accurately previously, involving tax evasion or earnings from illegal activities. This is the same as using voluntary disclosure or a tax pardon program.
When CRA offers a tax amnesty program, the situation is not something that has to be met with nervousness. By filing a voluntary disclosure and coming forward to report their undeclared income, taxpayers can breathe easy with relief as the process is not unpleasant, particularly when they have their accounts represented by professionals. In the bargain, they also avoid civil or criminal prosecution. They will also save themselves from penalties and have their interest charges reduced.
A taxpayer qualifies for the tax amnesty offer only when
- CRA establishes that the disclosure is voluntary and that it is accurate and complete.
- The disclosure involves a penalty.
- The disclosure includes information which is at least a year past or earlier.
The disclosure by the taxpayer has to be done before CRA approaches that particular taxpayer with a demand to file. The disclosure should not be just to cover up late filing under a year from the due deadline for the purpose of avoiding late filing penalties or prosecution. To be eligible for the Tax Amnesty program, all the conditions above need to be met.