Blog

Do You Need To Clean Up Your Tax Account?

It is tax season once again and the majority of people are focusing on the current tax year that they are responsible for filing for.   Then there are those that have not really kept their tax affairs in proper shape and now may be the time that you want to correct these mistakes and get a nice clean start with your tax obligations moving forward.

The CRA recognizes that many individuals have run into trouble in previous years with their tax situation and have left this unattended to. In order to allow them to come clean and get a fresh start they have offered a Voluntary Disclosures Program. It may be that you have made a mistake with some previous filings that you have neglected to correct.   This is what the voluntary disclosures program is in place for, it is to remove that fear.

Once you have filed a voluntary disclosure you will have to pay the taxes owed plus the interest.   While the interest may be substantial it will be even more so if there have been penalties attached which through the disclosures program will be forgiven.  You may also be forgiven potential prosecution depending on the circumstances.

What is important to realize is that if you want this program to work to your advantage you have to take the first step in coming forward with where the mistakes are and that you are going to correct them.   If it is where the CRA is now running after you and they are aware of these mistakes then the voluntary disclosures program is going to serve no purpose to you.

There is criteria for a disclosure to be valid and you must meet all of these criteria.   The first one of course being that it must be voluntary and that you are not being pressured to do so by the CRA.   There must be a penalty that has been applied to it which is potentially going to be forgiven.  It must be a mistake that is at least one year old and your disclosure must include all of the information necessary to correct the problem.

Voluntary disclosure can be used by many different entities not only just by the personal taxpayer. It can be used by businesses and employers as well as trusts and estates.

There is a proper format that you will have to follow to do your voluntary disclosure and this is by submitting a form called RC 199.   You can access through this through the CRA portals such as your “my account”. You can submit the document through the submit documents online CRA portal as well.

What you have to remember is that mistakes and omissions will eventually become noted by the CRA and you are far better off to take the first step and correct to this problem so you can take advantage of the Voluntary Disclosures Program rather than being subjected to the full wrath of this CRA.

If this is a position that you think you are in you should talk to your accountant about this issue and this professional can assist you in following through with the Voluntary Disclosures Program.

 

Share Your Thoughts!

Contact

Sam Seidman, CPA, CA, LPA
629 Sheppard Avenue West
Toronto, Ontario
M3H 2S3

Telephone: (416) 398-1700
Fax: (416) 398-6226

Chartered Professional Accountant, Chartered Accountant, Licensed Public Accountant

Email: sam@torontoaccountant.ca

Contact Sam today

The information provided here and throughout the site of TorontoAccountant.CA is intended for general tax information only, and should not be misconstrued as a legal source of information regarding your tax situation, or be used for any other purposes other than for general information.
Sam Seidman, Chartered Accountant - Copyright ©2013. All Rights Reserved.