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Voluntary Disclosure

A new client neglected to file income tax since 2011 and is owing tax for every year except 2019 where she is entitled to a $1,500 refund. I will be filing a Voluntary Disclosure for the previous 7 years.

My questions:
CRA says the amount of taxes owing must be included with the filing. Does she get to reduce her payment by the anticipated GST/HST refunds which accrue to her?
Does she get to reduce her payment by the amount of the refund anticipated in 2019?

Will she be considered to not have filed in full if the reduced amounts are paid?

Any advice is appreciated.

A few years back I had a self-employed client with 12 years worth of previous years unfiled returns. Amazingly the business’ paperwork was first rate!
After finalizing the lot, with a total amount owing of over $100,000, not including interest & penalties, I called the CRA on his behalf before sending anything, to explain the situation.
I was told to send them one at time, starting with the oldest and wait for their reply and instructions before sending the following one.
After about 4months, once the CRA received and processed all returns and with the final amount owing, I was able to negotiate a reasonable bi-weekly payments both satisfactory to CRA and my client.

deleted - moderator

Deleted - moderator

Unfortunately, the above response from taxwave doesn’t really apply to yours since you’re filing it under the VDP, which must all be filed at the same time, so you don’t want to follow that advice.

She should pay it all ignoring the refunds, so it’s paid and then the refunds will be refunded when they are processed. You definitely don’t want to reduce the balance by any expected GST credits/refunds since that is technically a different program/department, so that could cause problems.

I ended up deducting the GST/HST credits (not from the HST program), the Trillium credits, and the carbon tax credits. I decided to do that rather than have her pay the entire amount and wait for credits. I may regret doing it that way but based on another VDP I filed, I won’t know for sure for more than a year. The last VDP was filed a over year ago with no response to date. I detailed it all - there is room to show deductions from tax payable so I decided to take advantage of that.