Google the words “tax amnesty” or “voluntary disclosure” and you’ll be presented with a bevy of lawyers and accountants who promise to help you clean up your back taxes or unreported income with a cure-all solution called a voluntary disclosure. VDP for short.
Let’s set the record straight about what a VDP is and, more important, what it is NOT.
A VDP is an administrative process created by the CRA to save them the time and trouble of tracking down tax evaders.
It words on an exchange of promises.
You promise to file your outstanding tax returns, or file amended returns reporting the assets or income you’ve hitherto neglected to mention.
The CRA promises to review all your information and then, if you qualify, accept your tax returns for assessment without punishment in the form of penalties or criminal prosecution for tax evasion.
There is no promise of legal protection.
There is no promise that you will not in the future be criminally prosecuted for non-filing or tax evasion.
There is no promise that all the evidence provided in your voluntary disclosure will not be used against you in the future.
Some persons who want to come forward use their own or another accountant to negotiate a disclosure with the CRA. This can work, but accountants cannot offer them the legal protection of solicitor/client confidentiality. Also, accountants can be forced by the tax authorities not only to provide all their client’s personal papers but also to testify in any criminal tax prosecution or civil tax case. Some say I am both a lawyer and an accountant, all in one package, and this gives me an advantage. Being qualified as both a lawyer and an accountant can bring its own danger. In a U.S. tax case, the dually qualified lawyer/accountant had to testify against his client as to the part of his services that dealt with accounting. In tax cases this is usually substantial. Bottom line – more is not always better.
As experienced tax litigation and criminal tax evasion defence lawyers, we know that a voluntary disclosure can quickly become a trap for extracting confessions out of unwary tax delinquents.
That’s when we at DioGuardi created our own unique concept of Tax Amnesty.
A DioGuardi Tax Amnesty is NOT simply an ordinary voluntary disclosure.
It is NOT an administrative application for safe-passage with forgiveness of penalties and interest.
It is, instead, a serious confession of what could be criminal behaviour, submitted to the greatest extent possible under the safeguard of solicitor/client privilege, and presented as a legal defence requesting a full exoneration of your actions.
By acknowledging the nature of your actions and presenting your defence at the outset, DioGuardi is able to invoke your charter rights against self-incrimination, and thus may seek to exclude evidence revealed to the CRA, should you be prosecuted in the future for your non-filing or non-reporting.
As such, a DioGuardi Tax Amnesty offers serious legal protection.
Remember, when you exercise the provisions of the CRA’s voluntary disclosure program, there is no second chance.
You only qualify if the CRA has no prior knowledge of your tax delinquency.
You can’t start with a simple VDP and then, if you run into trouble, bring it later to DioGuardi to fix it.
By then, it is most likely too late.
You best defence is to START with DioGuardi Law – the tax lawyers who started Tax Amnesty in Canada.
© DioGuardi Law
This article provides only an overview and does not constitute legal advice. You are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained in the context of your particular circumstances.