The first thing that many people would like to know about this issue is how to make the voluntary disclosure? In order to do that, the taxpayer must make a submission to the Canada Revenue Agency and that submission must include all facts, omissions and errors that have happened. When the CRA receives this T1135 voluntary disclosure, it sends back to the taxpayer a letter in which it will inform the taxpayer what the next steps should be and which additional info should be submitted.
Making a voluntary disclosure comes with numerous advantages. One of them is that if the voluntary disclosure gets accepted by the revenue agency, then you are not liable for any penalties that might have been otherwise imposed for your unreported income. Some of those penalties may be very harsh, so this is the major advantage why you should make a voluntary disclosure. Another great advantage is that if your voluntary disclosure is accepted, then the revenue agency will not prosecute you criminally for the tax errors or the omissions you have made.
In order for the revenue agency to accept the voluntary disclosure, specific conditions must be met. The disclosure will be considered voluntary if the taxpayer does not have knowledge of some enforcement action that is taken towards him or her at the moment or that is about to start. T1135 voluntary disclosure must contain full and correct facts for all tax years when the information was incomplete, unreported or inaccurate.
So what are the ways for coming clean if you realize that you have failed to file the tax form for some previous year? The best solution is to submit the T1135 form through the voluntary disclosure program. This is a formal program that gives the taxpayers chance to correct the information they have inaccurately disclosed without fear for penalties or criminal prosecution. It is highly advisable for you to get professional help regarding going through this process, because most of the ordinary people do not know what steps it involves and how it should be done correctly.
In order for the disclosure to be valid, it must be voluntary and complete, there has to be an application that states the potential punishment, and the disclosure must contain all information that was previously withheld or omitted. If the disclosure is accepted by the Canada Revenue Agency then the penalties will be waived.