Common VDP Questions
Common Questions We Get on the Voluntary Disclosure Program:
Do I need a lawyer to file the VDP?
No. We are Chartered Professional Accountants and prepare many Voluntary Disclosures. A lawyer does not need to be involved, although some law firms do offer the service of preparing the application and then have accountants prepare the tax returns. By having us do your Voluntary Disclosure we make sure that the tax filings and VDP all work together on your behalf and provide the CRA with consistent information.
Will this impact my spouse?
Typically one spouse doing a VDP should not impact the other spouse’s tax return but there are certain situations that do cause the spouse to be impacted. For example, when one spouse files as single and receives child tax benefits and/or GST/HST credits, those credits may need to be repaid to CRA once the household income is revised to reflect the second spouse’s income.
What if the CRA says no?
If the CRA has not contacted you or any of your companies or spouse regarding unfiled returns, outstanding balances, etc, then you should not have a problem. We will review with you the different areas of contact before submitting the VDP application. If we find that you are not eligible, then we will not file a VDP for you, and instead will discuss other options. The CRA does not have taxpayers go through the VDP just to change their mind and charge the penalties after all. This seems to be concern among taxpayers but it is not representative of CRA behavior.
Do I have a risk of going to jail?
One of the benefits of the VDP is that there is that is removes the threat of criminal prosecution. This program allows you to report previously unreported income. If there is fraud or other criminal activity outside the scope of the voluntary disclosure, then you will need to consult a criminal lawyer.
What do I do if I do not have any records?
Come talk to us. We have had many situations where taxpayers have been accepted in to the Voluntary Disclosure Program without complete documentation. We will work with what you do have to figure out the best way to prepare your tax returns in a honest and representative manner..
Am I going to be automatically audited?
No. This program is a separate department from audits. The purpose of this program is to have taxpayers come forward on their own accord and become onside with CRA. If the CRA audited people for doing a VDP, then the program would not be nearly as popular. That being said, anyone could get audited, but we are not seeing any correlation between VDPs and audits at this time.