When you think of CRA (Canada Revenue Agency) they probably don't come off as people who want to help you #Grizzlybear. CRA routinely gets bad publicity and distaste from people yet a less known fact is that the CRA have set up programs to help the average Canadian if they choose preventive programs.
CRA has a preventive program set up known as the voluntary disclosure program for individuals who have fallen behind in their tax filings. The CRA knows that it’s near impossible to Audit every Canadian and hence why our Tax system is based on a “Self-Assessment”. This Self-Assessment is a double edged sword because if you declare something falsified on your tax return you will be sentenced to penalties and interest hits that ‘would’ have potentially bought you a new Car. #ItStings
Life happens and as such Tax filing take a back seat. To be eligible for this program there are a few conditions that must be met before the tax payer can take advantage of this. The following Four conditions must exist for Voluntary Disclosure
The Disclosure must be “voluntary” #CaptainObvious. If you have already received a letter from the CRA stating you are being investigated or audited. It’s already too late and you are no longer eligible. You must initiate the disclosure and contact the CRA before they contact you.
The Disclosure must be complete and accurate to the best of your knowledge. You can’t conveniently leave out details. Trust me you don’t want to go down this path.
The Disclosure needs to involve a penalty. A penalty only exists if you owed taxes according to your tax assessment. If no penalty exists then declare and file your tax return as usual even if it’s late. If the CRA owes you a refund there is no penalty.
The Disclosure of the information being provided must be a minimum of one year old. If the Disclosure is less than one year and you are not employed in an attempt to use this program to file late and avoid penalty. Nope not going to work!
All these conditions are meant to be clear from the CRA’s perspective however sometimes a consultation is required to ensure you are truly eligible for the assistance. It’s critical to consult your Accountant/Tax Lawyer to see if you can be eligible for this program or the Tax Payer Relief program. Not filing your taxes is a downward spiral to financial trouble. Remember the CRA is merciless and will #ding you with compounding penalties and interest.
Prevention is better than Medicine and this is the CRA’s way to help individuals get out of tax troubles and get back on the right track. The first step and most important step is to get your taxes filed. Wait for the notice of assessment and then move forward with the clean-up. You can try doing this yourself as well or if you’re not comfortable you can engage an Accountant to help you get this quickly and accurately filed.
Contact your Accountants today click on this link —> https://capexcpa.com/contact
- The Capex Team