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Let’s set the record straight about what a VDP is and, more important, is NOT.
In 2006, when the CRA shifted the VDP program from the jurisdiction of the Appeals Division into Enforcement – otherwise known as the Tax Police – as experienced tax litigation lawyers, we realized that a voluntary disclosure had suddenly become a trap for extracting incriminating information from unwary tax delinquents.
That’s when DioGuardi created our own unique approach that turns a VDP into the true legal protection of a DioGuardi Tax Amnesty.
In no time at all, the internet was filled with a swarm of tax lawyers and accountants who, without really knowing what we do, represented that they, too, could resolve your tax problems with a tax amnesty.
All you have to do, they say, is file a simple application and PRESTO! No prosecution. No penalties. No problem.
In reality, that’s where a serious problem starts. Because by approaching a VDP as a simple administrative application, these tax lawyers and accountants are unwittingly waiving your legal rights and exposing you and your financial information to the scrutiny of the Taxman.
An accountant is unable to protect your information.
A lawyer is not automatically safer. Your first conversation with a lawyer may be by solicitor-client privilege. But as soon as your lawyer files a VDP application you are deemed to have voluntarily disclosed the details of your tax delinquency, and thus have waived your legal right against self-incrimination and therefore confidentiality.
Why do you think it’s called a VOLUNTARY disclosure? It’s a trap right from the beginning. Here’s why:
As defined by s. 239 of the Income Tax Act, failure to report income for the purpose of evading tax is an offense prosecutable in the criminal courts and punishable by penalties, fines and jail time. Failure to file tax returns (s.238) is just a lighter version of s.239, by virtue of the fact that failing to file is also failure to report income.
Notwithstanding the unquestionably legal nature of offenses under s.239 and s.238, and the threat that prosecution for these offenses pose to the security of the person, the CRA disingenuously presents the off-the-shelf Voluntary Disclosure application as a prophylactic against both prosecution and punishment. Yet the VDP is no more than a policy created from an administrative interpretation of s. 220 (3.1), which permits the Minister the discretion to waive or cancel penalties and interest.
Prosecution is not part of the equation, and is not in the purview of the Minister to dismiss. Thus there is a glaring disconnection between the promise of protection from prosecution, which is the most compelling consumer proposition of the VDP, and the section of the law on which it is founded.
A Voluntary Disclosure application does not confer automatic absolution. Prosecution is an option always preserved as a sword of Damocles to be wielded at the absolute discretion of the CRA. To protect from prosecution, a legal approach must be established at the outset of the disclosure and maintained throughout. Failure to do so leaves a taxpayer bereft of legal rights, and even undermines solicitor-client privilege, both of which will become essential in the event the disclosure is denied. It is thus surreptitious of the CRA to encourage tax professionals – accountants and, particularly, lawyers – to approach the resolution of such tax delinquency strictly through administrative policy, not law.
DioGuardi Tax Amnesty ensures that the legal continuum is unbroken throughout the submission and review of your Voluntary Disclosure, thereby protecting your information should your VDP application be denied and prosecution ensues.
Anything less puts you and your future at risk.
Remember, when you come forward under the provisions of the CRA’s Voluntary Disclosure Program, there is no second chance. You can’t try a simple VDP and then, if you run into trouble, bring it to DioGuardi for a second chance at it. A VDP is only possible if the CRA has no knowledge of your non-filing or non-reporting.
Your best defence is to start with the tax lawyers who started Tax Amnesty in Canada.
Free yourself...with DioGuardi Tax Amnesty.
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