MOCK TAX AUDIT & VDP CRA

Friendly CRA Audit and Voluntary Disclosure Assistance

Mock Tax Audit for VDP CRA

Benefits of the Voluntary Disclosure Program (VDP CRA)

The Canada Revenue Agency runs the Voluntary Disclosures Program (VDP CRA), which gives you a second chance to correct a previously filed tax return or to file returns that were not filed.

If the CRA accepts your VDP application, you would be eligible for relief from prosecution, penalties, and in rare cases, from interest.

However, you must pay the taxes owing in full.

Income Verification for Voluntary Disclosure Program (VDP CRA)

we use CRA Net Worth technique in our Mock Tax Audits

Once the CRA has started an income tax audit/examination or criminal investigation for tax evasion, it is very costly to resolve the tax disputes.

Therefore, it is essential to identify the tax issues earlier and fix them before the CRA knocks on your door.

To accomplish that goal, we offer what we call a “Mock Tax Audit.”

We will act as a CRA auditor, and we will identify the areas of compliance that could trigger a CRA Audit. If we recognize areas with a significant risk, we will conduct a full or partial tax audit.

We will perform the Mock Tax Audit based on the audit steps and procedures that the CRA follows, as described in the CRA Audit Manuel. We check the completeness and accuracy of the income reported and expenses claimed in your personal and corporate tax returns.

In case your books are incomplete or unreliable, we will calculate your income based on the Net Worth Audit Technique used by the CRA.

The CRA uses this technique in many audits of cash-based businesses classified by the Agency as an “underground economy.”

The Net Worth Audit is the method used to verify the income when the CRA concludes that business books and records are inadequate.

During the Mock Tax Audit, we will identify the issues, omissions, and errors.  We will prepare a report, and we will explain our findings.

Depending on the risk’s materiality, we will recommend a solution to fix the mistakes, which could be a request for adjustments to already filed tax returns or proceeding with what is called Voluntary Disclosure of Unreported income (VDP CRA).

Ex-CRA Officer is here to Help

Boris Davidkov, CPA, CGA, worked as Small Business Tax Auditor for 8 years and 4 years as a Criminal investigator with the CRA.

Voluntary Disclosure Program (VDP CRA)

The last resort to avoid prosecution and Tax penalties

In case we identify a significant amount of unreported income, we will recommend proceeding with a Voluntary Disclosure Program (VDP CRA) administrated by the CRA. Voluntary compliance is the basic principle of Canadian tax systems.

However, failure to report income – even through ignorance or misunderstanding – can raise substantial civil penalties or leave you liable to prosecution.

We will approach the CRA on your behalf, and we will make what is called a “voluntary disclosure” of unreported revenues.

As your representative, we are entitled to negotiate payment terms and CRA on your behalf without disclosing your identity. We will also request relief of the interest and penalty due to unremitted taxes.

It is not advisable to approach the CRA without seeking professional advice directly.

If you contact the CRA, they may not inform you of all of your options, and they can choose to start an audit or investigation, which could make you liable for penalties of up to 200% of the amount of the reassessed taxes and a jail term of up to two years.

Before contacting CRA and proceeding with the Voluntary Disclosure Programme, we will assess your situation. We will review your case, and depending on the amount of unreported income involved and the complexity of your case, we will recommend a solution.

Our Firm will provide you with assistance and representation during the voluntary disclosure process by conducting the following steps :

  • Review your tax situation;
  • Conduct Mock Tax Audit to determine the full amount of the income to be disclosed in the VDP CRA;
  • Disclose unfiled tax returns and income;
  • Negotiate the terms of your disclosure to avoid penalties, interest and prosecution for tax evasion;
  • In some cases, we recommend a tax lawyer to represent you during the Voluntary Disclosure (VDP CRA);
  • If you engage a tax lawyer, we provide litigation and accounting support during VDP CRA.

Book a free consultation

Meet with us to learn how you can benefit from the Mock Tax Audit and the Voluntary Disclosure Program – VDP CRA.

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