The Canadian Revenue Agency's Voluntary Disclosure Program is a way for the CRA to lift some of the weight of unpaid taxes off citizen’s shoulders. Voluntary Disclosure in Canada also has many direct and indirect benefits for both the CRA and citizens with backed taxes and other tax related issues. Voluntary Disclosure is basically tax amnesty and permits eligible citizens to report previously unpaid or unreported taxes and have any penalties or interests reduced or expunged entirely. This system has many advantages in that it permits citizens to avoid or decrease accrued fees, potentially even massive fines and jail time. It permits the CRA to get paid the funds it's due, even if without late interest, as opposed to none at all. There is also a large reduction in stress for taxpayers with backed or due taxes. It permits taxpayers to participate anonymously and not disclose significant information such as social security number and address. There are, however, stipulations and requirements that have to be met in order to voluntarily report taxes and have fees reduced or removed.
Canada's tax amnesty works well for the CRA mainly because it, if nothing else, increases their chances of being paid money they were already owed. While the CRA may have been initially owed such funds from various people they were not paid and to have them, at the very least, paid would be a boon for the CRA. It also has a few added bonuses in satellite areas as well, such as the judicial system and the prison system. The reduction in fines and fees means less court cases against taxpayers, less fines charged, less paperwork filed, and less inmates. Presuming that taxpayers are willing to participate and disclose information before they face legal consequences and fines, which is a much better idea for all parties, the system works superbly. The tax amnesty provides a streamlined approach to a nations tax issues and consequently cleaned up the legal sector in the process. While it may seem that people would not pay taxes they could not pay, let alone fines, it stands to reason that if the end is imprisonment or larger fines then it would be the best option to voluntarily disclose the information. The CRA has effectively demonstrated a degree of flexibility, which will, in the end, work to their advantage as well as to the taxpayers advantage.
For taxpayers with an assortment of tax issues there is no reliable solution other than paying. The longer taxes pile up the worse it becomes until you face exponentially larger fines, the kind that can but a hold on many parts of your life, or even jail time. The Voluntary Disclosure program gives people who have not quite reached the legal tipping point of being contacted by federal agents or subpoenaed the opportunity to avoid dire consequences. By paying the owed taxes and, depending on situation, some or none of the additional interest fees or fines from late or incomplete filings a taxpayer can not only avoid serious punishment. There more obvious bonus for eligible people is the reduction or total removal of their fines. An important thing to note is the impact this has on people's mental and physical health. Many people with backed taxes are usually not criminals but afraid and the stress eats at them. When the bills rack up even higher the stress gets worse and can precipitate into serious problems bot physical and mental. While the tax amnesty laws are no prescription to treat anxiety or stress they can afford an opportunity to prevent or end a lot of future or current stress.
The tax amnesty program also offers an anonymous disclosure if an individual may so desire. The advantages of this are most likely to assist in collateral damage from poor practices. Credit scores are impacted by poor tax practices and an anonymous reporting system may prevent some from suffering a hit to their credit as well. The Voluntary Disclosure program does have stipulations and requirements before one can be eligible for the benefits. For example, if an individual has already been contacted by the CRA or is currently in legal proceedings they cannot apply. The reason being that the individual is not voluntarily disclosing the information, they are disclosing under legal pressure. The degree to which fines can be reduced, or if they can be removed totally, depends on how much is due in interest or fines and what the interest or fines are for. For those who have fines that cannot be removed there payment plans for paying a monthly fee to make it easier. All in all the entire setup is a benefit to both the state and the citizens, and effective system for dealing with unpaid taxes by reducing punishment and positively reinforcing taxpayers.