The CRA reviewed the VDP's No-Name Disclosure policy as a result of representations since the policy was introduced in October 2005.
As a result of this review, the CRA is:
- Confirming and clarifying its position on the application of the 90-day Period filing timeframe in the current policy; and
- Providing clarification with regards to the issue of potential assessment of taxation years.
Information circular IC00-1R2 will be revised to reflect these policy clarifications.
1. 90-day Period
The CRA maintains the timeframe stated in the policy whereby taxpayers submitting a no-name disclosure must provide their identity within 90 days from the effective date of submission, or the disclosure file will be closed by the CRA.
The CRA will clarify two key applications of the “90-day” period: Identity of the Taxpayer and the Timeframe for the submission of a complete disclosure.
A. Identity of the Taxpayer
Should a taxpayer decide to proceed with a no-name disclosure, their identity must be provided to the CRA within 90 calendar days from the "effective date of disclosure". The "effective date of disclosure" for a no-name disclosure is the earliest date that a CRA tax services office receives a completed VDP-1 - Taxpayer Agreement Form, as used for the VDP, or a written voluntary disclosure request containing the basic information defined by the CRA for this purpose.
During this 90-calendar day period the taxpayer is protected from the application of penalty and from prosecution. If, at the end of this 90-day period, the identity of the taxpayer remains unknown, the no-name disclosure file will be closed, without further contact from the CRA. No extension of this 90-day period will be allowed to identify the taxpayer.
B. Timeframe for the submission of a complete disclosure
If necessary, the taxpayer may have up to 90 calendar days from the "effective date of disclosure" for the submission of additional relevant information and/or documentation that may be required to complete the disclosure. Therefore, a final and complete submission of the disclosure is also normally expected within the 90 calendar days from the "effective date of disclosure". However, if this time frame is not sufficient due to the complexity of the disclosure or other extraordinary circumstances, the Assistant Director, Enforcement Division, of your nearest tax services office, may authorize an extension of this period to a new agreed upon date. The additional information must be provided by the new agreed upon date.
2. Reassurance of Assessable Years
The CRA is clarifying the application with respect to the reassurance of assessable years.
In a no-name disclosure, the VDP officer may discuss the number of potentially assessable taxation years with the taxpayer and/or their representative. The officer can inform the taxpayer and/or their representative, on a without prejudice basis, of the possible tax implications. In these cases, a written response may be provided stating that if the facts as presented in the no-name disclosure do not change when the identity of the taxpayer is made known, the CRA may assess the taxation years involved for the amount indicated in this response.
Prior to providing such advice , the VDP officer must be reasonably assured that the taxpayer and/or their authorized representative have provided all the information required. Also, the VDP officer can confirm the validity of the disclosure only after they have received the identity of the taxpayer.
