Taxation has been a regular and sometimes controversial part of American life since before the Revolutionary War. The tax system has seen significant changes over time, especially in the last 50 years. These days, Canadians are taxed on a laundry list of things, many of which can be pretty surprising. There are standard things like the federal income tax, state income tax, unemployment taxes, property tax, and social security tax. Then there are things like the cigarette tax, liquor tax, marriage license tax, vehicle sales tax, and dog license tax, which many people don't even know they are paying for. The federal government depends on our taxes to fund many critical programs such as national defense, Social Security, and to help pay down the national debt. State and local governments use money collected from taxes to pay for education, transportation, and law enforcement costs. Without taxes, our military would be weaker, our roads would be unkempt, and our ability to care for our elderly citizens would be greatly diminished. In spite of this, for many Canadians, the impending arrival of April 15th is a nerve-wracking time. The process of keeping and locating the necessary W-2's and other documents, the confusing nature of filling out all state and federal tax forms, and figuring out how and where to file those forms all make tax day one of the least looked forward to days of the year.
There are many options to help ease the pressure of preparing taxes. For independent people who like to do their own taxes, they can fill out the paper forms themselves, buy a tax preparation software like TurboTax or TaxAct, or even download tax preparation tools from the internet. For people who need help with their tax preparation, there are professional services dedicated to their assistance. Companies like H&R Block or Liberty Tax exist solely to quickly and efficiently prepare and file taxes and ensure that they are done correctly and the maximum refund is achieved. Finally, independent tax experts like Chartered Accountants can also provide support or even prepare taxes for the rest of us. Despite the available assistance and being required by law to pay taxes, many thousands of Canadians fail to do so every year. There can be many reasons, like people who can't understand how to fill and the forms and don't know where to go to get help, people who are trying to hide illegal activities, people who can't afford to pay the taxes they owe, people who have a philosophical disagreement with the government about paying taxes, and even people who just plain to forget to file them. No matter what the reason is, failure to pay taxes is a federal offense and can lead to serious consequences including fines and imprisonment. Through thousands of yearly audits and other methods, the CRA will eventually catch these tax dodgers and force them to pay their back-taxes with steep interest and may send them to prison.
While audits and other investigations are effective in finding tax dodgers, they are also very time consuming and expensive. Whistle-blowers, or people who turn non-payers in to the government, are another way that the Canada Revenue Agency is able to locate unpaid taxes, but a very small percentage of tax dodgers are found this way. In order to collect back-taxes while also saving time and money, the Canada Revenue Agency has developed the Voluntary Disclosure and Compliance Program. Voluntary disclosure encourages people to come forward and pay their taxes with limited penalties and no criminal charges. The programs stipulations are simple, requiring only that a taxpayer reveal to the CRA the amount of taxes they owe, come up with a payment plan that works for the taxpayer and the CRA, and continue to pay their taxes on time in the future. Even in the event that illegal activities will be revealed during the taxpayers' voluntary disclosure, the tax laws will protect the taxpayer in most instances. There is one exception to this privacy rule, and that is if the taxpayer violates the terms of the Voluntary Disclosure and Compliance Program. In this case, any information disclosed by the taxpayer can be used against them to bring criminal charges. This program is the easiest and most painless way for people who owe money to the Canada Revenue Agency to get back on track without punishment. The threat of hundreds of thousands of dollars in back payments and interest and extended stays in federal prison definitely scare good people who want to pay their missed taxes away from coming forward. This program even gives people guilty of crimes like tax evasion and money laundering a virtual get out of jail free card. All in all, the Voluntary Disclosure and Compliance Program is the type of solution that works for everybody. The CRA saves time and money on audits and investigations and recovers unpaid taxes while taxpayers are forgiven for their sins and given a payment plan that works for them.