How to come clean with the tax man

Owing back taxes is costly and eventually illegal. What to do to stay out of trouble.

Matthew Elder 26 May, 2017 | 5:00PM

After dominating the lives of taxpayers and tax accountants alike during April, May's spring rains have washed away the tax-season stress -- unless you are in the unfortunate position of being indebted to the Canada Revenue Agency.

At the least, in addition to the amount of tax owing, you will owe a penalty plus interest. But if you find you are unable to pay off your tax debt within a reasonable period -- say, a few months -- you will need to contact the CRA (and Revenue Quebec too, if you are a Quebec resident and owe provincial tax) to negotiate a repayment plan.

And if you have failed to report income on previously filed tax returns or have simply failed to file a return when you should have, you can come clean with the CRA through its Voluntary Disclosure Program.

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Matthew Elder

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