CRA Voluntary Disclosures Program: Fix Past Tax Errors Before an Audit

No one files a perfect tax return every year. Whether due to misunderstanding the rules, poor record-keeping, or deliberate avoidance that you now regret, the CRA's Voluntary Disclosures Program (VDP) offers a path to fix past errors before the CRA finds them — with significant penalty and interest relief.

What Is the Voluntary Disclosures Program?

The VDP is a CRA program that allows taxpayers to come forward and correct inaccurate or incomplete information in previously filed returns, or file returns that should have been filed but were not, before the CRA initiates an audit or investigation.

In exchange for voluntary disclosure, the CRA offers relief from criminal prosecution and, depending on the track, reduction or elimination of gross negligence penalties and interest.

• Covers income tax, GST/HST, payroll deductions, and information returns
• Can correct errors going back 10+ years
• Protects against criminal prosecution for tax evasion
• Must be truly voluntary — cannot be already under audit

Two VDP Tracks: Limited vs General

As of March 2018, the CRA operates two separate tracks with different levels of relief depending on the nature of the disclosure.

• General Program: for disclosures involving inaccurate or incomplete filings, missed filings, or HST/payroll errors. Provides relief from gross negligence penalties and possible interest relief.
• Limited Program: for major non-compliance including deliberate tax evasion, unreported offshore assets, or large dollar amounts. Relief is more limited — penalties still apply, but prosecution is avoided.

Eligibility Requirements

To qualify for VDP relief, your disclosure must meet four criteria: it must be voluntary, complete, involve a potential penalty, and relate to information that is at least one year past due.

• Voluntary: CRA must not have already contacted you about the issue
• Complete: you must disclose all inaccuracies, not just some
• Penalty: the disclosure must involve information subject to a penalty if CRA found it
• One year: information must be at least one year overdue (with exceptions)

Common Situations for VDP Applications

The VDP handles a wide range of tax issues. These are the most common situations we see Ontario clients use it for.

• Unreported rental income or side business income
• Missed HST registration and filing obligations
• Undisclosed foreign income, accounts, or assets
• Incorrectly claimed deductions or credits
• Failure to file T4, T5, or other information returns
• Unreported cryptocurrency gains or income

How to Apply and What to Expect

VDP applications can be submitted through the CRA's My Account portal or by mail. You have the option of submitting anonymously through a representative (your CPA) for an initial no-name disclosure, which protects you while you assess the response.

Processing time is typically 6–12 months. A CRA officer reviews the application and issues a decision letter. If accepted, you pay the assessed tax plus reduced interest within the agreed timeframe.

• Submit via CRA My Account or paper (Form RC199)
• Anonymous pre-disclosure available through a representative
• Pay all outstanding taxes plus interest before relief is finalized
• Processing: 6–12 months average

Key Takeaways

The CRA's VDP is one of the most valuable programs available to taxpayers who have made errors. The key is acting before the CRA acts first — once you receive an audit notice or query related to the issue, you lose the ability to disclose voluntarily. If you have unreported income or missed filings, a CPA can help you assess whether the VDP is the right path.