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Voluntary Disclosure - On a No-Name Basis

Subject: Voluntary Disclosure Number: 05-26 Date: 10/14/2005

There is a 90-day limit to disclose the taxpayer's name

The CRA recently clarified its policy on no-name voluntary disclosures in a press release dated October 1, 2005. In general, a voluntary disclosure can be made on the basis of identifying the taxpayer or on a no-names basis. Where a taxpayer is identified immediately, then they are protected from any subsequent investigations or contact by the CRA. On a no-names basis, however, some advisors were unclear as to whether there was this protection from penalties when the name had not been given. The CRA has clarified its policy. The taxpayer is protected on a no-names basis for 90 days from the time the initial submission has been made. Essentially, the initial date for the voluntary disclosure on a no-names basis is either the date of receipt by a CRA Tax Services Office of a written voluntary disclosure submission or the receipt of a completed taxpayer agreement form (VDP-1).

This means that once CRA has made an official recording of the no-names voluntary disclosure, then there is a 90-day limit within which the name of the taxpayer must be given. If the name of the taxpayer is not given within this 90-day period, then the voluntary disclosure file is closed and the taxpayer is no longer protected from penalties or investigation.

A no-names voluntary disclosure is a powerful tool that taxpayers should use when applicable. However, a taxpayer and/or his advisor cannot use this on a perpetual basis. Instead, there are 90 days within which to complete a voluntary disclosure and submit all relevant information.

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