If you haven’t filed your tax return for a few years in Canada, it’s important to act quickly to minimize penalties, interest, and potential legal issues. While we will deal with income tax returns, other returns can include GST/HST Returns and others.
Here’s a practical step-by-step approach to resolve your situation:
1. Gather All Your Information
- Collect T4s, T5s, RRSP slips, and any other income or deduction records for each missing year.
- If you’re missing slips, you can get copies through the CRA My Account or by calling the CRA.
2. Determine If You Owe or Expect a Refund
- If you owe taxes, penalties and interest accrue from the filing due date.
- If you’re owed a refund, there’s a 10-year limit to claim it — so older years may be lost if you delay.
3. File the Missing Returns
- You can use certified tax software, a tax preparer, or CRA paper forms for each year.
- File all missing years, starting with the oldest, to bring your account up to date.
4. Consider the Voluntary Disclosures Program (VDP)
- If you owe money and want to reduce penalties, you can apply to the CRA’s VDP before they contact you.
- This can result in penalty relief and partial interest relief, but only if you come forward voluntarily and completely.
5. Contact the CRA (If Needed)
- If you can’t pay the full amount, the CRA may allow a payment arrangement based on your financial situation.
6. Avoid Future Problems
- Set reminders for annual filing deadlines (April 30 for most individuals).
- Keep your tax documents organized each year.
It would be best to contact our office immediately to start the process of resolving your situation as you may be able to take advantage of the Voluntary Disclosures Program (VDP).
The Voluntary Disclosures Program (VDP) grants relief on a case-by-case basis to taxpayers and registrants who voluntarily come forward to fix errors or omissions in their tax filings before the Canada Revenue Agency (CRA) knows or contacts them about it.
If you want to maximize your VDP success, you’ll need to:
- Submit a letter before the CRA contacts you.
- Include all missing years in one package.
- Provide full supporting documentation.
You can review whether you are eligible or not, and what situations that are eligible by reviewing the details on this page at the CRA’s website.
This process can be done on your own, but we highly recommend that you use a tax professional in our office to work through the process with you.