May

More VDP Stats

Posted By: David M. Piccolo on May 25, 2010 at 9:40:05 in News , Taxpayer Representation & Litigation

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More VDP Stats

On May 5, 2010, CRA released statistics on the number of voluntary disclosures they’ve received for the past few years. The following is a summary of their figures (all are approximate):

• 2005-06 Fiscal Year – 7,300
• 2006-07 Fiscal Year – 8,240
• 2007-08 Fiscal Year – 8,400
• 2008-09 Fiscal Year – 11,400

CRA’s news release does not indicate the cause for the dramatic increase from the 2007-08 fiscal year to the 2008-09 fiscal year, but I can speculate on a couple of reasons. The poor economy could have caused the increase for two reasons. First, individuals may have had to tap into their savings due to the downturn, and if a portion of the savings was off-shore, a voluntary disclosure may be used as part of the repatriation process. Second, individuals may have strategically filed voluntary disclosures as part of a bankruptcy in an attempt to avoid the new bankruptcy provisions that apply to individuals with large tax debts (where their tax debts would otherwise exceed $200,000).

Another possible cause for the spike in voluntary disclosures is the increased visibility of the program due to the highly publicized case regarding Swiss bank UBS and the IRS.