What exactly is tax amnesty? Tax amnesty (Voluntary Disclosure) is when a government or a tax collection agency offers a plan to tax payers of their jurisdiction who have illegally skipped out on paying part or all of their taxes it will usually result in them paying the amount of taxes plus interest and fines while the government will agree not to press charges if paid by a certain date. Governments grant tax amnesty to make some part of the money back that the government could not collect taxes on without having to go through the courts and legal system and possibly putting some one in jail, this allows governments to recover lost revenue quicker and without dealing with court fees and other cost associated with a court trial. Once a tax amnesty program is opened it is generally ran for a limited time on a volunteer basis. A person comes forwards and agrees to pay the amount of taxes to the government in return of not being fined or sent to jail. This offers a favorable outcome to both the government and individual. Most people think that tax amnesty is just for the rich but a majority of people helped by tax amnesty are not wealthy. Every year worldwide millions are helped by different tax amnesty programs some designed for the rich some for the middle class. Over all tax amnesty programs are seen as helpful tools to help the government recover lost money while keep everyday citizens out of jail.
For Canadian/United citizens the United States recently offered tax amnesty to American citizens living in Canada. This program offers tax amnesty to millions of low compliance risk Canadian Americans living in Canada who have unfiled taxes in the past six years. To be available for this program the person applying for amnesty must be a Low compliance risk, and have less than $1500 in unpaid taxes per year over the past 6 years. The IRS will determine if someone is low compliance risk by looking at past return filings and other finical documents. Every year over a million Americans seek tax refuge in Canada but in recent years the American Tax Service or IRS has been cracking down on people who hide money over national borders. The IRS is offering this latest tax amnesty to Canadian/Americans so that they can become current on their taxes while not being put at risk for fines or jail times. This tax amnesty program will become active on September 1st 2013.
The United States is not the only country cracking down on International safe havens to hide tax free money. The Canadian Revenue agency (CRA) has recently started tracking down citizens who have skipped out on paying taxes. Under Canada’s Voluntary Disclosure Program a taxpayer who voluntarily tells the CRA they have not paid incomes taxes must will be required to pay the amount of taxes plus fees and fines while avoiding jail time. The fines often amount to the interest the government would have collected on this money. Many people think that they can get away with tax evasion. Last year 68 % percent of the Canadian population said they over compensated or didn t report income that was paid in cash when surveyed by the CRA, also 76 percent of these people believe that the CRA will not find out about under the table cash income. Over this past year this has led to an increase in audits by the CRA nearly 250 convections involving jail time and fines have come from these audits. While some tax evasion can be accidental such as seniors not reporting out of county pensions all tax evasion is considered a crime in Canada, While many people in Canada do not realize that they must pay taxes on worldwide income and Canadian pay. While the CRA is being vicious tracking down cheaters on tax they still offer one of the best amnesty programs in the world, allowing the citizen to pay the amount and continue on with their life. The CRA has started offering no name negations allowing a person to stay anonymous until they have reached an agreement with CRA on the amount to pay back and other terms of the amnesty agreement. Even though Canada has one of the best track records for their amnesty programs the CRA still stress that people trying to file for Tax amnesty should contact a tax lawyer to help protect them self.
While both the United States and Canadian governments have offered tax amnesty programs to their citizens living in Canada. Both countries are expected to continue cracking down on tax evaders in to the future. Taking this into affect over the course of the next few years tax amnesty programs in Canada are expected to increase in use and size. This will allow people in Canada who have accidently on purposely cheated on their taxes to come clean and not be sent to jail. Tax amnesty Canada is a great way to avoid harsh legal consequences.