Updated Rules for the CRA Voluntary Disclosures Program
Under the new Voluntary Disclosures Program (VDP) rules the Canada Revenue Agency (CRA) has introduced a significant procedural change by removing the longstanding 90-day extension option.
Under the previous framework, taxpayers could submit an initial disclosure and then request additional time to gather missing documents. That flexibility is now gone. The CRA will now not consider any disclosure that is not complete when reviewed. This tightening of the process fundamentally changes how taxpayers must prepare before filing, and consulting a Toronto tax lawyer can help ensure the disclosure meets the new requirement.
What the 90-Day Extension Used to Allow
For years, the extension provided an important buffer. Taxpayers dealing with multi-year non-compliance, missing business records, foreign reporting issues, or cryptocurrency activity often needed more than a few weeks to reconstruct accurate information.
The extension acknowledged that voluntary compliance sometimes required significant document retrieval and financial reconstruction. Removing this option means that the CRA now expects full completeness from the outset.
Why the CRA Removed the Extension
The CRA’s position is that the extension created inconsistency and administrative delay. Some taxpayers filed incomplete disclosures merely to “hold their place” in the system. The CRA wants disclosures to be fully ready at the time of filing, with complete facts, documents, and reconciled figures. The intention is to streamline processing and ensure that applicants are genuinely ready to correct past non-compliance rather than testing the program without full preparation.
What a Complete Disclosure Means Under the New Rule
Completeness now requires significantly more upfront work. A disclosure must include every document and calculation the CRA needs to determine the correct tax owing. This means gathering all financial information and actually preparing the returns or adjustments, the required schedules, the applicable CRA forms, and any outstanding GST/HST returns.
In other words, the taxpayer must complete the full tax work in advance rather than submitting raw records or partial summaries. The new standard leaves essentially no margin for missing documents, incomplete explanations, or unprepared tax filings.
Strategic Considerations Going Forward
Because the extension is gone, preparation timelines must shift. Taxpayers considering disclosure should begin gathering records as early as possible. Reconstructing income, reviewing business activity, retrieving foreign documents, or reconciling cryptocurrency transactions can take weeks or months.
In many cases, filing prematurely will be worse than waiting to complete the file. If you disclose past errors or omissions without providing all required information, the CRA will not consider the disclosure. Following that, the CRA can, at least theoretically, immediately audit the taxpayer, reassess multiple years, and impose full penalties, interest, and potentially gross negligence penalties. The taxpayer also loses all protection normally available under the VDP, including protection from prosecution.
Professional guidance from a Toronto tax lawyer is now even more important, as the CRA will not allow mistakes to be corrected after filing.
Kirshen Tax Law Can Help
We are focused on CRA disputes and voluntary disclosures, and we assist clients in preparing complete, defensible submissions that meet the CRA’s new procedural requirements. With no 90-day extension available, a disclosure must be correct and complete on day one.
If you are considering a disclosure or need advice on preparing one under the new rules, contact Kirshen Tax Law for a free consultation with a Toronto tax lawyer to help you determine the safest and most effective approach.
Jeff Kirshen BA, JD (CA), JD (US)
Tax Lawyer | Founder, Kirshen Tax Law
Disclaimer
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