If the decision is made to proceed with the voluntary disclosure application we will draft an initial application to CRA advising of the facts and the pending documents to be prepared and submitted. Or, depending, we will submit the requisite tax returns with the disclosure application.

We can request up to 90-days, as per CRA policy, from the submission of the disclosure application to file the requisite tax returns. As mentioned, the VDP is relatively flexible in operation as CRA seeks to attract taxpayers to disclose. Over the years we have submitted hundreds of disclosure applications and direct experience has taught us that reasonable extension requests are accepted. 

The CRA will respond with an Effective Date of Disclosure (“EDD”) letter. The EDD is normally the date of the application. The EDD is key as from that date any CRA action (e.g. from another CRA department not yet aware of the disclosure) related to the disclosed non-compliance will not invalidate the disclosure, i.e. the non-compliance was voluntarily disclosed by the EDD so the taxpayer is protected from that date.

We normally suggest that we retain an accountant, on behalf of the client, to prepare the necessary tax returns to be submitted within 90 days from the initial application, the presumed EDD. 

Once the returns are completed we will review and discuss payment of the tax owing. If the entire amount owing cannot be paid at once we will work with CRA to arrange a payment plan.

If we are certain that we have met the VDP conditions, outlined below, then it is likely the voluntary disclosure will be accepted. Importantly, throughout the entire process it is not necessary that the client communicate directly with the CRA. We act as intermediary between the client and the CRA and once we receive the CRA acceptance letter the only remaining issue is paying the tax owing.