Correct Past Tax Mistakes Without Penalties or Prosecution

Have you failed to report income, filed incorrect returns, or not filed at all?

The CRA’s Voluntary Disclosures Program (VDP) may allow you to correct your tax affairs without incurring penalties or facing prosecution.

At TaxHelp.ca, we help Canadians confidentially navigate the VDP to resolve past tax problems before the CRA catches on. Whether you’re behind on your taxes, missed reporting foreign income, or didn’t file the right forms, we can help you disclose your situation the right way.

What is the Voluntary Disclosures Program?

The Voluntary Disclosures Program (VDP) allows taxpayers to:

• Avoid late-filing penalties
• Avoid gross negligence penalties
• Avoid criminal prosecution
• Possibly receive partial interest relief

The program is open to individuals, businesses, and corporations that need to correct:

• Unfiled tax returns
• Misreported income or expenses
• GST/HST reporting errors
• Foreign income or T1135 omissions

To qualify, your disclosure must be:

• Voluntary (the CRA has not contacted you about the issue)
• Complete and accurate
• At least one year past due, or include a correction that reduces taxes owing

Common Reasons to Use the CRA Voluntary Disclosures Program

We’ve successfully filed hundreds of VDP applications for Canadians in situations such as:

1. Unreported Income

Failure to report income – whether accidental or intentional – can result in gross negligence penalties (up to 50%) and, even prosecution.

Common examples include:

• Side business income not reported alongside T4 employment
• Cash-based business revenue omitted from returns
• Businesses filing “nil” returns while operating

How we help:
We prepare and submit VDP applications with accurate revised returns, protecting clients from harsh penalties. In many cases, this also results in clients receiving partial interest relief.

2. Incorrect Income or Expense Reporting

Occasionally taxpayers file returns with inaccurate income or overstated deductions either due to error or to reduce taxes owing.

• Underreporting sales
• Inflating business expenses
• Double-claiming deductions or omitting GST/HST adjustments

How we help:
We prepare corrected tax returns and align changes across multiple filing types (personal, corporate, and GST/HST). We ensure the CRA receives a complete and compliant submission, reducing risk of further review or penalties.

3. Unfiled GST/HST Returns

Self-employed Canadians or small businesses frequently:

• Collect GST/HST but never remit or file
• Operate without registering for GST/HST
• Allow multiple years of returns go unfiled

Important: Input Tax Credits (ITCs) expire after four years.

How we help:
We assess your eligibility for retroactive ITCs, prepare corrected returns, and submit a VDP application designed to minimize penalties and interest.

4. Unfiled Tax Returns / Back Taxes

Haven’t filed taxes in years or ever? You’re not alone.

• Sole proprietors and gig workers
• Students or newcomers to Canada
• Retirees
• Corporations inactive for years

How we help:
We determine the required filing period, reconstruct missing information, and submit all returns under one coordinated VDP application.

5. Unreported Offshore Income

• Foreign pensions
• Bank accounts
• Rental property abroad
• U.S. stock income
• Inherited overseas assets

How we help:
We review all foreign assets, determine taxability, and prepare the VDP submission with full protection.

6. Missed T1135 Foreign Income Verification Forms

• Foreign bank accounts
• Overseas rental property
• U.S. investments

How we help:
We file missing T1135s through VDP and help avoid penalties up to $2,500 per year.

Why Use a Tax Professional for Your VDP Application?

The CRA reviews VDP applications closely. If your submission is incomplete or non-compliant, you may lose protection.

• Risk analysis
• Corrected filings
• Complete VDP file preparation
• Communication with CRA from start to finish

Penalties You Can Avoid Under the VDP

Voluntary Disclosures Program: Common Questions

Do I need a lawyer to file under the VDP?

No. You don’t need a lawyer to file a Voluntary Disclosure. We are Chartered Professional Accountants and handle Voluntary Disclosures regularly., Although some law firms do offer the service of preparing VDP applications, the tax returns are still prepared by accountants. When we handle your VDP, we prepare both the application and the returns, making sure everything lines up and the CRA gets consistent information.

Will this impact my spouse?

Typically, one spouse doing filing a VDP application will not not impact the other spouse’s tax return, but there are certain situations where this isn’t the case. For example, if one spouse files as single and receives child tax benefits or GST/HST credits, those credits may need to be repaid to the CRA once the household income is revised to reflect the second spouse’s income.

What if the CRA denies my application?

If the CRA has not contacted you, your spouse, or any of your companies regarding unfiled returns, outstanding balances, etc, then you should not have a problem. We will review all possible points of CRA contact before submitting the VDP application. If you are not eligible for a VDP application, we will recommend alternative solutions to address your tax situation.

It is exceptionally rare for the CRA to accept a VDP application and later reverse its decision to apply penalties. While this is a concern for some taxpayers, it is not typical CRA practice.

Do I risk going to jail?

One of the main benefits of the VDP is that there is that is removes the risk of criminal prosecution for the issues disclosed. This program allows you to report previously unreported income. If there is fraud or other criminal activity outside the scope of the voluntary disclosure, then you will need to consult a criminal lawyer.

What do I do if I do not have any records?

Contact us. We have dealt with many cases in which taxpayers have been accepted into the Voluntary Disclosure Program without complete documentation. We will work with what you do have to figure out the best way to prepare your tax returns in a way that is both accurate and representative of your situation.

Am I going to be automatically audited?

No. The VDP is administered by a separate CRA department from audits. Its purpose is to encourage taxpayers to come forward voluntarily and get back into compliance. If the CRA routinely audited people for using the VDP, the program would not work as intended.

While anyone can be selected for an audit, we have seen no indication that filing a VDP increases that likelihood.

📞 Call today to correct past mistakes

If you’ve made tax mistakes in the past, the worst thing to do is wait. The CRA is increasingly effective at finding errors, and once they contact you, you’re no longer eligible for the Voluntary Disclosures Program.