Voluntary Disclosure (Tax Amnesty)

A voluntary disclosure application (also known as a tax amnesty application) allows a taxpayer to correct their tax affairs with the Canada Revenue Agency (CRA) without penalty or prosecution. This can include unreported or underreported income from employment or business (including E-Commerce or eBay income), unreported capital gains, or any error made on a previously filed tax return.   A voluntary disclosure application with the CRA can cover both income tax and GST/HST.

A successful voluntary disclosure application offers taxpayers three benefits:

1. CRA will not pursue any criminal prosecution against the taxpayer.
2. CRA will not charge the taxpayer with any civil penalties.
3. CRA may reduce the interest charged on any outstanding balance.

A successful voluntary disclosure application must meet all four of CRA’s criteria:

1. The disclosure must be voluntary.
2. The disclosure must be complete.
3. The disclosure must involve an actual or potential penalty.
4. The disclosure generally must be related to information that is more than one year overdue.

You can find more information on the voluntary disclosure program from the CRA.

For more information on how the voluntary disclosure program in Canada works or to proceed with a voluntary disclosure application, please contact David M. Piccolo.