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Voluntary disclosure best option for coming clean with CRA

For Canadians who may be wondering how to go about disclosing their unreported income to the Canada Revenue Agency (CRA), the good news is that the taxman has a specific program designed to get you to come in out of the cold, Toronto tax litigation lawyer David J. Rotfleisch tells The Globe and Mail’s Rob Carrick.

Appearing on Carrick Talks Money, Rotfleisch, founding tax lawyer at Rotfleisch & Samulovitch Professional Corporation, explains that the key to the Voluntary Disclosures Program is to go to the CRA before they come to you.

“If you do that, and if you give a full disclosure before they’ve started any audit or investigation, then there’s going to be no prosecution for tax evasion, there’s going to be no penalties, and I can often get you a reduction of the interest rate,” he says.

As Rotfleisch explains, in addition to the CRA being able to collect taxes owing, the idea of the program is that once a person comes onto the system, they are likely to become a good taxpayer going forward.

However, not everyone will be eligible to make a voluntary disclosure.

“For example, as you probably know, the Panama Papers released the names of 350 Canadians. If you are on that list but the CRA has not yet started something, you’re still eligible for the program. However, if CRA is asking around, has started their investigation, it's too late,” Rotfleisch says in the video.

Ultimately, Rotfleisch suggests individuals with unreported income or overclaimed expenses “come clean, do a voluntary disclosure and sleep at night.”

To Read More David Rotfleisch Posts Click Here
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