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Susan Ward

The Penalties For Not Filing Canadian Income Tax

By March 28, 2012

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A reader writes: "I haven't filed my income tax for several years. What are the repercussions I can face if I file them this year?"

The late-filing penalties can make this a costly mistake. As you see, the standard late-filing penalty is 5% of the balance owing and an additional 1% of the balance owing for each full month that your return is late, to a maximum of 12 months - but if you haven't filed for several years, the penalty for filing your Canadian income tax late could even be higher.

You may be able to decrease the penalties by using the Canada Revenue Agency's Voluntary Disclosures Program; this program "allows taxpayers to come forward and correct inaccurate or incomplete information or to disclose information they have not reported during previous dealings with the CRA, without penalty or prosecution" (CRA).

Another thing you can do is to hire a tax lawyer to mediate with the Canada Revenue Agency if you can afford it.

My advice to anyone who has missed a filing deadline for their Canadian income tax; you definitely need to file your taxes on time this year and get your past tax situation sorted out because the longer you put it off, the more expensive it will get.

More on Canadian Income Tax

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December 15, 2010 at 3:34 pm
(1) gino77 says:

There may even be options other than lawyers. There are companies that specialize in dealing with late income taxes and helping those with tax problems.

December 29, 2012 at 4:29 pm
(2) Jerry says:

Its perhaps better these days to get sent to prison because the government feeds and gives more opportunistic to criminals than people that cant get jobs, let alone even make enough money to owe Canada feds any money..i am hoping for three squares a day and the chance to get reeducated and plus they pay you while you ae in prison..its a win win..let the immigrants have it all, thats the governments mandate any way !

November 6, 2013 at 9:16 pm
(3) Dude says:

You only go to jail for evasion, which means not declaring that you owe the tax. If you admit and file your return but do not pay you will not go to jail. Look at the cases cited, they were grievous and usually involved businesses not declaring GST. If you were the governments Lackie and collected the tax, you have to forward it to them. There is no jail time for declaring you owe taxes and just don’t pay. I may be wrong, but everything I find leads me to that conclusion. I am sure I will get some accountant, that I would never hire, that will disagree but remember the accountants are just covering their own asses.

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