Do you owe back taxes? Did you make mistakes on your taxes or file deductions that do not apply to you? How about some additional expenses to pad your return? Don't worry because Canada has a voluntary tax disclosure program. This program can be very helpful to individuals that wish to avoid tax problems with the government. People are able to use this program if they filed their taxes and did not disclose all the income they received, if they filed deductions that they were not eligible for at the time, or are even behind on filing their taxes. There are some criteria that you must qualify for to be eligible for this program however. To be eligible for the Canada Disclosure Program you must have a tax return that has penalties, the year of the tax problem must be at least one year old and the person must want to disclose the problem voluntarily. This program is only for people who have not been contacted by the Canada Revenue Agency, if you have been contacted then you would not be voluntarily disclosing your issues.
Canadas Disclosure Program is a great way to avoid penalties and prosecution. By filing form RC199 you can tell the government what you filed incorrectly. Then they will only charge you the amount of taxes that you owe and any interest from that amount. But, by doing this you not only avoid any additional penalties, you also avoid being prosecuted. Prosecution can lead to owing much more money than you actually intended to, possible jail time, embarrassment if people you know find out, but also having to hire an attorney and paying that person money as well. When you file this form, you are basically telling on yourself. So when you send that form in you need to send as much of the money you owe in taxes with your disclosure. It is not mandatory to do this, but the amount of interest will still continue to pile up while you wait for the CRA to get back to you. This amnesty program also saves the CRA a lot of money that they would have to use to prosecute tax payers. It's a win, win situation for everybody. The government is not really out to get you, they just want the money that is owed to them.
As soon as the Canada Revenue Agency receives your voluntary disclosure form, your disclosure becomes effective. They accept the form RC199 by mail. The agency will then contact you by mail. They will let you know what the next step will be in the process. They might also mail you letters requesting that you send them more information. They only will give you 30 days to send that information back to them. It is really important to send them the information they request as fast as possible. If they don't get what they are requesting from you in the 30 day time period, then they will deny your disclosure and you will be back in the same boat that you started in. Plus, they will then be fully aware of what you were initially trying to hide. Now they have all the information, provided by you, to fully prosecute you under the law. This program is somewhat user friendly and can be done by yourself. There are also many lawyers out there that can help you file all this paperwork and help you with any information they request from you. But hiring a lawyer to help you can cost you a lot of money, and by filing this form you are trying to save money if they prosecute you or add penalties. However, if you are not good with paperwork or filing deadlines it may be in your best interest to contact a lawyer. A cheaper option may be to contact an accountant because they are fully aware of tax laws and can also help you file all the paperwork and get all your financial affairs in order. It may also be an asset to you in future tax years if an account is involved with your finances throughout the year and can file your yearly taxes on your behalf. That will save you from making the same mistakes over and over again.