Back Taxes: Undisclosed Income

What do you do if you have not declared all your income?

Undeclared income is a risk. Not declaring your income is a no no i.e. illegal. This would fall under the definition of tax evasion. CRA frowns upon this type of activity and imposes severe penalties for this - jail time is one of the penalties for tax evasion. What should you do? Well, the first step would be to consider if you qualify for the Voluntary Disclosure program. The criteria for the VD program is as follows:

Four Conditions for a valid Voluntary Disclosure Submission

In order for your Voluntary Disclosure application to be valid, four conditions must be met.

Firstly, the taxpayer must voluntarily come forward with the submission. If the CRA brought it to the taxpayer’s attention that he or she incorrectly filed a return or the CRA commences an enforcement action (e.g. audit, investigation, information request regarding unfiled returns, etc.) against the taxpayer, the “voluntary” condition is not met.

Also, the disclosure must be complete. This requires that the disclosure provides full and accurate facts and documentation for all reporting periods where there was previously inaccurate, incomplete or unreported information relating to any and all tax accounts with which the taxpayer is associated. Minor errors or omission will not invalidate this requirement.

Thirdly, a disclosure must involve a realized or potential penalty. The penalty type may be a late filing penalty, a failure to remit penalty, an instalment penalty, or a discretionary penalty, such as an omission penalty or a gross negligence penalty. In the event a penalty does not apply, the taxpayer cannot seek relief through the Voluntary Disclosure program.

Lastly, the information in the disclosure must be more than one year out of date. This requirement exists because the Voluntary Disclosure program was not intended to allow for penalty avoidance for recently late-filed returns.

If any of the above conditions are not met, a submission will be deemed invalid.

Tax Doctors Canada can help if you have outstanding taxes

Do you have any outstanding taxes that need to be paid? Is the Voluntary Disclosure program right for you? We can help answer these questions and with your Voluntary Disclosure submission. The professional certified tax accountants at Tax Doctors Canada have extensive experience and success in providing back tax solutions that serves our clients’ best interests. Let Tax Doctors Canada provide the best solution for your requirements.

Tax Doctors Canada has 3 office locations (by appointment only) in Toronto, Markham and Mississauga to serve you. You can also have one of our certified tax accountants assist you with your personal tax return requirements remotely from the comfort of your home utilizing Tax Doctors Canada's secure document transfer portal. We accept clients from Canada and worldwide.

Free Initial Phone Consultation

Tax Doctors Canada offers a stress free Initial Phone Consultation with one of our professionally certified tax accountants. We Welcome Your Business!

Do not hesitate any longer. Contact Us by Email or call 1 855 TAX DOCS (+1-855-829-3627) for a free no obligation consultation regarding all your back tax filing needs. If you have back tax issues, the professional tax accountants at Tax Doctors Canada can negotiate a settlement for you with the tax department and possibly save you interest, penalties and prosecution.