Is a voluntary disclosure the right move for unfiled personal taxes?

Most people who are simply late do not need the Voluntary Disclosures Program. They need the returns filed. VDP is for a disclosure that meets CRA’s conditions: it is voluntary, it is complete, a penalty would apply, and the tax is included or a payment arrangement is accepted. Voluntary means CRA has not already contacted you about that issue, and you are not already under audit or investigation on it. Complete means the years and the income are disclosed, not a sample.

Acceptance is not guaranteed. A disclosure that is accepted can relieve penalties and some of the interest calculation that goes with them. It does not erase the tax. It is not a negotiation of the rate you wish you were in. If no penalty would have applied — a refund year, for example — VDP is the wrong program.

Decide before anyone phones CRA

The mistake we see is a nervous call. The taxpayer describes five unfiled years and a side business, CRA notes the call, and the disclosure is no longer voluntary. If you might need VDP, the first conversation is with the person preparing the disclosure, not with the general enquiries line.

• Use ordinary filing when the slips are employment income CRA already has and you are just late.
• Look at VDP when there is income CRA does not have: cash sales, foreign accounts, crypto, or a rental never reported.
• A demand to file, an audit letter, or a contact about that specific issue usually ends the voluntary test.
• You still file every year in the disclosure. VDP is not a substitute for the T1s.
• Do not send a partial story to “test the reaction.” Incomplete disclosures fail the test.

What we will and will not promise

Tax Everyday will tell you whether your facts even belong in a disclosure conversation, and what the returns show. We will not promise that CRA will accept a disclosure. If the right path is ordinary filing, a straightforward year is $90 plus HST and a ready self-employed year is $650 plus HST. A disclosure file is quoted, because the work is the years plus the submission.

Bring a list of years, a list of income you think CRA does not have, and any letter CRA has already sent. The letter decides the path faster than the story does.