Voluntary Disclosure Procedures Change

The Canada Revenue Agency (CRA) recently released an updated information circular (IC00-1R3) pertaining to the Voluntary Disclosure Program (VDP), which promotes tax compliance by encouraging taxpayers to come forward and correct prior errors and omissions.

Doing so will save the cost of penalties, but not the additional taxes that may result. Under this program, the taxpayer may also recover refunds or credits owed by the CRA.

The new circular replaces the one issued in 2007 and the big news is that submissions must go to one of three intake centres: taxpayers in the Pacific Region will send their submissions to the Surrey Taxation Centre; for the Atlantic, Quebec and Ontario Regions, submissions are to be made to the Shawinigan-South Tax Centre; and for taxpayers in the Prairie Region, submissions are to be sent to the Winnipeg Tax Centre. Addresses are listed below.

As the CRA explains, the VDP “promotes compliance with Canada’s tax laws by encouraging taxpayers to voluntarily come forward and correct previous omissions in their dealings with the CRA.”

An interesting feature of the VDP program is the “no name disclosure method”, which is an optional method of proceeding under the program for those who are nervous about revealing their identity at an early stage. The no name method allows taxpayers to discuss their issues with the CRA in an open and candid manner, but without the fear of prosecution. In informal meetings under the no name disclosure method, if all the other required information for a complete disclosure is present except for the identity of the taxpayer, the CRA can review this information and advise, on a without prejudice basis, the possible tax implications of the particular situation. Of course if any of the details change or are actually different than explained later on, the taxpayer would still have to face the consequences of that reality.

The program continues to require voluntary and complete information to be disclosed on a taxation issue involving the application of a penalty, and the information must be at least one year past due (unless the submission is to correct a previously filed return). If the submission is accepted, the CRA will agree not to pursue tax evasion charges, will waive any other penalties that would otherwise apply, and will usually reduce the amount of arrears interest charged.

Regional Tax Centres

For the Atlantic, Quebec and Ontario Regions
The Voluntary Disclosures Program
Shawinigan-South TC
Post Office Box 3000, Station Bureau-chef
Shawinigan, QC  G9N 7S6 
Fax: 1-888-452-8994

For the Pacific Region
The Voluntary Disclosures Program
Surrey TC
9755 King George Boulevard
Surrey, BC  V3T 5E6
Fax: 604-951-5691

For the Prairie Region
The Voluntary Disclosures Program
Winnipeg TC
66 Stapon Road
Winnipeg, MB  R3C 3M2
Fax: 204-984-4141