In Canada, most taxpayers are nervous when taking the initiative to come clean with the Canada Revenue Agency (CRA) about past matters. For those taxpayers, the CRA provides the option of a “no-name” disclosure. This allows the taxpayer to test the tax-waters. In a no-name disclosure, the information provided by the taxpayer is the same as that required by the CRA in a voluntary disclosure except for the taxpayer's identity. Following a no-name disclosure, a VDP officer from the CRA can confirm that there is nothing to suggest, at first instance, that may disqualify the taxpayer benefiting from the VDP, other than the identity of the taxpayer.
In such scenarios, there is an important role for a chartered accountant. The practice of an accountant provides a robust range of services, including financial statement preparation, bookkeeping, personal & corporate income tax returns, tax & estate planning, business advisory services. They work closely with each client, allowing the client to focus on achieving their business and personal goals. accounting team focuses on their client's unique requirements and expectations. This approach allows the accountant to see the larger picture and anticipate their client's needs, having a positive effect on their client's income.
If Canadian residents haven't reported their foreign income, they can file a VD to report these amounts. The CRA has wide powers to demand records and information. A person who hides information is subject to prosecution under section 238 of the Income Tax Act. Strongly consider retaining a Toronto based Canadian taxation lawyer who has experience in these areas for assistance.
The CRA offers an administrative program which allows delinquent taxpayers to “come clean” with respect to past errors or omissions and pay any back taxes owed while avoiding the imposition of penalties or possible jail time. That option is the CRA's Voluntary Disclosure Program.Assisting a client through the maze of a Voluntary Disclosure s a big challenge, and is one that an accountant undertakes on behalf of a client. An accountant can help determine what information is needed to succeed in the application, how best to approach making a disclosure, and what the benefits will be.
Sam Faris is the Certified Chartered Accountant in Canada, who serves numerous individuals and corporate clients, business advisory services and voluntary disclosure program are one of our specialties.