Several significant changes to the VDP guidelines that tax advisors should be aware of:
1. The new guidelines confirm the application of the VDP program to disclosures related to recently introduced taxes.
2. The new guidelines replace the concept of “General” and “Limited” programs with the regime of “Unprompted” and “Prompted” applications.
3. The new guidelines provide instructions on the number of years for which to provide supporting documents.
4. Under the new guidelines, the CRA appears to be much more receptive to considering subsequent applications.
There are a number of items that remain the same in the new guidelines. These include the requirement for the VDP application to include information that relates to a tax year that is at least one year past the due date for filing, the inability to use the VDP application to change previously assessed interest and penalties, the continued ability to request a pre-disclosure discussion, the requirement for payment or payment arrangement request to be included with the application, and the same rights of redress apply including the availability of a second administrative review and judicial review before the Federal Court apply. Taxpayers will also continue to be required to file the application using Form RC199. However, a contemporaneously released communication from the CRA indicates that the form will be simplified.
With tax rules becoming increasingly complex, it is inevitable that taxpayers may overlook certain obligations or make errors in compliance. This makes it all the more critical for tax advisors to be well-versed in the relief available under the VDP as a means of addressing and correcting non-compliance.
For questions or concerns, please contact Chris Bodnar.