What Is Tax Amnesty?

What Is Tax Amnesty?

If you have unpaid taxes or unreported income, a tax amnesty may be the solution. Amnesty is defined as "a general pardon granted by a government." A "tax amnesty" can grant a pardon for criminal and/or civil penalties for taxpayers that have failed to report taxable income.

Revenue Canada (CRA) has a discretionary power to cancel or waive penalties and interest and to correct inaccurate or incomplete information that the taxpayer had previously provided. If the disclosure is accepted, there will be no civil penalty or criminal prosecution.

Paul DioGuardi Q.C., as printed in Offshore Finance Canada

Who qualifies for Tax Amnesty?

According to the Canadian Income Tax Act, not filing a tax return, filing more than one year late if income tax is due, or failing to declare taxable income (from any source) are criminal offences. Yet, taxpayers often find themselves with unfiled tax returns for a variety of reasons; Unclaimed income from overseas, complexities of the tax system or one unfiled tax return that led to a build up of unfiled tax returns, to list only a few. Revenue Canada promotes voluntary compliance with tax laws. To encourage voluntary compliance, Revenue Canada offers a program called Tax Amnesty, or Voluntary Disclosure, in which criminal prosecutions and civil penalties can be waived when a taxpayer volunteers to report unclaimed income. If you have unclaimed income or unfiled tax returns you may qualify for a Tax Amnesty.

How to Obtain Tax Amnesty

While you may contact Canada Revenue Agency (CRA) on your own, an experienced tax lawyer can protect your identity while negotiating with the Canada Revenue Agency (CRA) and provincial tax authorities. Accountants, financial planners and hybrid lawyer/accountants can not offer the same lawyer-client privilege and may be compelled by Revenue Canada to present evidence against you.