The Changes & Uncertainty in the New Voluntary Disclosures Program (PT. 1)

[00:00] [background music]

Peter Aprile: [00:18] On this episode of "The Canadian Tax Insights Podcast," Yoni and I will discuss the CRA's changes to the Voluntary Disclosures Program. There's a lot to cover, so we decided to break our discussion into two parts. In part one, we'll give an overview of the Voluntary Disclosure Program and discuss its purpose.

[00:33] We'll also discuss how the Voluntary Disclosure Program currently operates, and we'll introduce the changes to the Voluntary Disclosure Program that are set to take effect on March 1st of 2018. In part two, we'll outline the uncertainty that the changes to the Voluntary Disclosure Program will bring and why we believe that there'll be an increase in VDP disputes.

[01:57] We'll also set out the specific new types of voluntary disclosure disputes that we expect to see, and last, we'll talk to Mac Killoran, a tax accountant, to get his perspective on how the changes to the VDP will affect his and other accounting practices.

Natalie Worsfold: [02:14] The Canadian Tax Insights Podcast is brought to you by Counter Tax Lawyers, a new type of tax controversy and litigation law firm. To learn more about Counter, go to countertax.ca. This podcast is also supported by Lexis Nexis Canada and the Lexis Practice Advisor Canada.

[02:33] The Lexis Practice Advisor Canada is an online database that gives Canadian lawyers practice notes, tools, and templates that you need to guide your legal practice. To learn more about Lexis Practice Advisor Canada, you can visit lexisnexis.ca. Stay tuned to the end of the episode to learn how listening to the podcast can help Canadian lawyers and accountants fulfill their CPD requirements.

[01:44] [background music]

Peter: [01:44] So what's the purpose of the Voluntary Disclosures Program?

Yoni Moussadji: [01:48] It's to allow taxpayers to come forward to CRA before any CRA contact to allow the taxpayers to correct any noncompliance, such as unfiled returns or information forms, unreported income, or incorrect transfer pricing amounts, things like that.

[02:08] Generally, it allows taxpayers to pay the tax, but to be relieved from the penalties, such as late filing penalties and gross negligence penalties and also, to be relieved from a portion of the interest on the tax.

Peter: [02:19] So, it's basically like confession for tax purposes?

Yoni: [02:21] That's exactly right. [laughs]

Peter: [02:23] So with that understanding, let's move to how the Voluntary Disclosures Program currently operates and the parameters of the program. The Voluntary Disclosures Program in its current format allows taxpayers to initiate a voluntary disclosure without releasing the taxpayer's name.

[02:38] So currently you can provide all the relevant facts to the CRA's voluntary disclosure officer, negotiate with him or her regarding whether the taxpayer would qualify, and the basis of the disclosure.

Yoni: [02:50] And it's important to note that during that negotiation time, before you release the name, the taxpayer is protected from any enforcement action that CRA might take.

Peter: [02:59] So as long as that initial voluntary disclosure is filed, then the protection starts from the date of filing.

Yoni: [03:05] And so, after the initial disclosure, the taxpayer has 90 days to negotiate with CRA, to try and get some sort of comfort as to whether the taxpayer qualifies for the Voluntary Disclosures Program and to cause the taxpayer and accountant to prepare the filings necessary to make the voluntary disclosure complete.

Peter: [03:23] So when you say, "comfort," at no point under the current program, so pre-March 1st, 2018, at no point would the CRA give the taxpayer or us any position that would bind the CRA, that the voluntary disclosure met the four conditions of the Voluntary Disclosures Program.

[03:39] But what we could access was, we could have the CRA give us some sort of, I would call it "soft comfort," to say that based on the facts that we've disclosed, the CRA would likely accept a voluntary disclosure, as long as no other information contrary to what was disclosed in the voluntary disclosure was subsequently disclosed, which would invalidate the disclosure in some other way.

Yoni: [04:01] That's exactly right. Generally speaking, after receiving that soft comfort from the voluntary disclosure officer, we would release the taxpayer's name, and submit the tax filings to complete the disclosure.

Peter: [04:12] Assuming that a voluntary disclosure goes in on November 1st, if enforcement action happens on December 1st, so after the initial voluntary disclosure was filed, and subsequently accepted, the December 1st enforcement action wouldn't count to disqualify that voluntary disclosure.

[04:29] And under the current program, so under the system that we have at the time of recording this podcast, the reasons for the taxpayer's error or omission, or the reason for the noncompliance wasn't relevant, or wasn't taken into consideration when the voluntary disclosure was filed.

[04:45] So even if a taxpayer had an intention to evade tax or hide assets offshore, it wouldn't affect whether the CRA would accept or reject the voluntary disclosure or how the CRA would treat that voluntary disclosure.

[04:59] All that mattered was that the taxpayer's disclosure met the four criteria, and the four criteria were voluntary, complete, the application of a penalty, and it had to deal with a tax matter that was more than one year past due.

[05:14] So what we were seeing, or what we have been seeing up until this point is, generally speaking, voluntary disclosure officers treat the VDP process more as a compliance exercise, checking boxes to see whether the voluntary disclosure met the four criteria. And the VDP officers didn't analyze the other factors. They didn't have to under the current information circular.

Yoni: [05:34] And the final element, with the pre-March 1st, 2018 program, is that paying the tax, again, is irrelevant in whether the voluntary disclosure is accepted or rejected.

Peter: [05:46] Right, so that kind of kept in line with what the CRA normally does, which is the assessment of tax and the collection of tax are two completely separate things, and a voluntary disclosure's acceptance or denial didn't have anything to do with whether payment was eventually made or not.

[06:02] And frankly, voluntary disclosure officers didn't ask about it and didn't have any questions about whether payment was going be made and how payment was going to be made. The voluntary disclosure would be accepted, assessments issued, and then the taxpayer would either pay the amount, or the CRA's Collections Division would become involved to seek to collect those amounts.

Yoni: [06:20] So now we'll move on to the next section, which is to review the Canada Revenue Agency's new Voluntary Disclosures Program, which, again, is set to take effect March 1st, 2018. There are a lot of significant changes to the new Voluntary Disclosure Program. We're going to highlight a few that we believe have the greatest impact on taxpayers, accountants, and lawyers.

[06:42] So the first one is that not all taxpayers are treated equally under the new disclosure program. There's a two-track program. The first track is the General Program for minor omissions, and the second one is called the Limited Program, which is for major or intentional omissions.

Peter: [07:00] So when the CRA says "limited," it's referring to the fact that the CRA will only now provide a limited amount of relief to taxpayers seeking to correct major or intentional omissions.

Yoni: [07:11] That's right, because the Limited Program provides much less relief than the General Program. So under the General Program, taxpayers will still receive full penalty relief, but will only receive up to 50 percent interest relief. Instead of under the pre-March 2018 program, taxpayers would receive a four percent interest relief. 

[07:30] Under the Limited Program, taxpayers do not receive any interest relief, and the only penalty relief they'll get is from gross negligence penalties now. So there isn't going to be any relief for late filing penalties, or anything else like that, if a taxpayer is in the Limited Program. 

[07:45] Another distinction between the General Program and Limited Program is for HST omissions, under the General Program, the taxpayer is only required to submit tax filings for the last four years. That's just for HST omissions. Whereas under the Limited Program, HST omissions, a taxpayer would still have to submit all tax filings for all years. 

Peter: [08:07] So a lot of this information is coming out of the new CRA information circular, which was released on December 15th, 2017, which is IC00-1R6. And in the IC, it states that a taxpayer's voluntary disclosure will fall under the Limited Program when there is, and I quote, "an element of intentional conduct on the part of the registrant or a closely related party." 

[08:30] And so what it appears is that the VDP officer will make the determination as to whether the taxpayer's voluntary disclosure will fall under the General Program or whether it will fall under the Limited Program. 

[08:42] So it appears that the voluntary disclosure officer will make a determination as to whether the VDP is going to fall under the General Program or the Limited Program. And the IC provides a non-exhaustive list of the things that the VDP officer will consider as part of his or her analysis of whether something should fall under the General Program or the Limited Program. 

Yoni: [09:03] So what you start to realize, as we see the Limited Program start to take shape in the information circular, and frankly, reading in between the lines, is that when we look at the Voluntary Disclosures Program pre-March 1st, 2018, it looked a lot more like a compliance exercise. 

[09:20] In the new VDP program, VDP officers are going to have to conduct a significant analysis and draw their own conclusions about whether a taxpayer should be in the General Program or in the Limited Program. 

Peter: [09:30] And this, we believe, is going to have a real significant impact on how voluntary disclosures are treated going forward, as well as the disputes that are going to surround them. 

Yoni: [09:39] So it's clear that intention now matters and impacts the relief that a taxpayer is going to receive under the Voluntary Disclosure Program. It's the voluntary disclosure officers that conclude regarding the taxpayer's intention.

Peter: [09:51] There's so much more subjectivity in the factors that are going to lead a voluntary disclosure officer to characterize something as falling under the General Program or the Limited Program. Any time, and we see this in other tax disputes and other areas, as well, any time you have intention into the mix, it's obviously rife with subjectivity. 

Yoni: [10:10] Another significant change that we see is that CRA has tightened the rules regarding what constitutes a voluntary disclosure. 

[10:16] And specifically, CRA will find that a disclosure is not voluntary if CRA's received information about the taxpayer's potential involvement in noncompliance. And that will include, if the taxpayer's named in an international bank leak, something like the Panama Papers or the Paradise Papers. As soon as something like that comes out, the taxpayer is prohibited from using the Voluntary Disclosures Program to correct prior noncompliance. 

Peter: [10:40] And again, we start to see that subjective element again, because there's no real guidance. We'll talk about this a little bit later, but there's no real guidance in terms of what it means to say that the CRA has received information. The bar could be very low or it could be very high. 

[10:55] And again, getting back to what you were saying earlier, if the voluntary disclosure officer is making that determination, then, I guess he or she has the authority to determine or will take that authority, or attempt to take the authority, to determine whether CRA has "received the information that's sufficient to put it in the General Program or the Limited Program." 

Yoni: [11:14] Some more uncertainty, then? 

Peter: [11:16] Yep. So, another significant change is that taxpayers can no longer initiate a voluntary disclosure on a no-name basis. 

[11:22] So, that idea that we were talking about at the outset of the podcast, where taxpayers would come forward on a no-name basis, gain their protection from an enforcement action that followed while we negotiate with the Canada Revenue Agency is now eliminated after March 1st, 2018. 

[11:38] And so, taxpayers won't get that protection from an enforcement action until the name is disclosed. And there's no longer an ability to negotiate with the CRA prior to releasing the name or getting that comfort. 

Yoni: [11:50] So, another significant change is that the application now has to include all tax filings. So, in the past, as we mentioned, a taxpayer would initiate the disclosure, possibly on a no-name basis, and then would have 90 days to both release the name and to prepare the tax filings and submit them to complete the disclosure. That's changing as well. 

[12:09] So, not only does the taxpayer have to release his or her name with the application, but also has to submit all the tax filings to make the application complete.

Peter: [12:17] And that's something I think we leveraged in almost every voluntary disclosure that we did whether it was named or no-name. We always took advantage of the 90 days to get the accounting records and tax filings prepared. It set the protection for the taxpayer as soon as possible. 

[12:30] And then even if it wasn't something that required significant negotiation with the CRA, but having that 90 days after that initial application was filed, provided the room that we needed and that the taxpayer needed to gather the information, ensure that the voluntary disclosure was complete, and then submit it to the CRA. So, that's something that we're just simply not going to have any more. 

Yoni: [12:48] And it was also a hard deadline at the taxpayer that the accountant knew that they had to satisfy. And now, instead, we have a circumstance in which we can't even initiate the disclosure and get the protection until all tax filings are complete and we're ready to proceed. 

Peter: [13:04] Which interestingly may put off voluntary disclosures from being filed. It always seems that [laughs] there's another date for accountants and taxpayers to gather the information to prepare tax filings to put them in. 

[13:15] And if they come to us and we say, "Well, we can't initiate the voluntary disclosure until all the information is gathered and the tax filing is complete," that might continue to extend the time in which the taxpayer actually is able to put us in a position to file the voluntary disclosure and move forward. 

Yoni: [13:31] Another element is that the taxpayer must also pay the CRA an estimate of the tax and interest at the time they initiate the voluntary disclosure application. If the taxpayer cannot pay the tax and interest in full at the time of filing, the taxpayer must enter into a payment plan with CRA. Failure to either pay the tax or enter into a payment plan will result in CRA rejecting the voluntary disclosure. 

Peter: [13:52] So this is where it's going to get really interesting or actually, well, this isn't the only part that's going to get really interesting. 

[13:57] [laughter] 

Peter: [13:57] But this certainly one aspect where this is going to get interesting because, first of all, I don't know where I am in terms of whether I believe it's appropriate to require a taxpayer to pay tax and interest as a condition for the CRA accepting a voluntary disclosure. There's something about that that seems off to me. 

[14:14] I understand the CRA's position in it. They want to protect the idea that the taxpayers are putting forward voluntary disclosures and then never paying the amount, or putting forward a voluntary disclosure and seeking protection under the Bankruptcy and Insolvency Act to further reduce the debt, I understand that. 

[14:28] But the idea that it becomes a, "Do you have enough money to qualify for the Voluntary Disclosures Program?" seems off to me. The other side of it that I'm curious about, let's put it that way, in terms of how this is going to work in practices, so, who's going to be negotiating the payment arrangement with the CRA? 

[14:46] So, is this like the voluntary disclosure officer now stepping into more of a collections role? Or how is that going to work? And are the terms of those payments, are the only acceptable payments going to be the similar to, or consistent with, what Collections normally accept? 

[15:01] So, if it's under six months, you have less of an issue or it's less of a negotiation, let's put it that way, in terms of CRA accepting the collection's arrangement. And if it exceeds that, then they want full financial disclosure. And then, further than that, anything over 24 months won't be accepted. 

[15:18] So, is it going to be the same collection policies in other areas that are now going to apply to the voluntary disclosure and who's going to be on the CRA side entering that negotiation? Are we going to need the voluntary disclosure officer as well as a collection officer or how is that going to work? 

Yoni: [15:32] I think there's going to be a collections officer involved. There's enough new elements in the new Voluntary Disclosures Program that voluntary disclosure officers are going to have enough on their plate. 

[15:40] I think that there's going to be either a collections officer or a series of collections officers whose mandate will be to support the Voluntary Disclosures Program. 

[15:48] And if, as part of the initial application, a taxpayer proposes that the taxpayer can't pay the tax in full and needs a payment agreement, that voluntary disclosure officer will then refer the taxpayer to a certain collections officer to try and reach some sort of payment agreement, and then that collections officer will then report to the voluntary disclosure officer. That's how I would anticipate it working. 

Peter: [16:09] Yeah, so now we have a team of voluntary disclosure people involved in every voluntary disclosure and [laughs] I can't imagine how much that's going to be to deal with, but... 

[16:20] [laughter] 

Peter: [16:20] And then, I don't want to jump the gun on this, because we're going to talk about litigation issues a little bit later, but I don't think that this is something that we've keyed upon. 

[16:28] But now are we looking at, so, the CRA has rejected a taxpayer's voluntary disclosure on the basis that they couldn't enter into the payment arrangement or a payment arrangement that the CRA would accept now this is another basis to challenge a denial of a voluntary disclosure? Is that where this is heading? 

Yoni: [16:44] Is what you mean that it was unreasonable for CRA to reject the payment plan? 

Peter: [16:49] Right. 

Yoni: [16:50] Which then led to CRA rejecting the entire disclosure. 

Peter: [16:53] That's exactly it. 

Yoni: [16:54] Yeah, I see what you're saying. 

Peter: [16:55] In any event, we'll get to a couple of those later. But, the other thing that causes me concern and a change is, is that for a voluntary disclosure to be accepted under the Limited Program, and again, this is kind of the more restrictive program, the CRA intends to require the taxpayer to waive his or her right to an objection. 

[17:13] And when they say that, it's not a blanket statement, I think that they try to narrow it a bit, but they say that the taxpayer must waive their right to an objection, and I'll quote, "to the specific matter disclosed in the voluntary disclosure unless the dispute relates to a characterization issue or a calculation issue." 

[17:31] And so, unless it falls under one of the those two parameters, so characterization, so let's say income capital, is the example that comes up most readily, or a calculation issue, so a numbers dispute which does happen, actually, a lot, in the Voluntary Disclosures Program, where the assessments or the re-assessments don't match what the results should be, then you can object. 

[17:50] But in all other cases, and all other instances, the CRA is saying that the taxpayer must waive the right to object. 

Yoni: [17:57] So, what I'm unclear with that is if the CRA accepts the disclosure and sends you a letter saying, "We're accepting your disclosure under the Limited Program," have you automatically waived your right, or are they going to send you a waiver and saying, "We're proposing to accept you under the Limited Program provided you sign this waiver and if you don't sign this waiver, we're going to reject your disclosure"? 

[18:17] I don't understand how the mechanics work. 

Peter: [18:19] Yeah, and so in the information circular that we read as well as any of the behind-the-scenes documents, how this is going to work practically, and this is a really good example of that, because it matters, whether it's a precondition or not matters, they haven't spoken to this at all. 

[18:34] And so I think as we all go through the program, we'll start to learn this. When you and I were preparing for this and talking about it, we mentioned to each other that we expect or suspect that the agency has released a new internal voluntary disclosure guidelines for its VDP officer workers.

[18:52] And that's not something at the time that we recorded this podcast we were able to get our hands onto, but we will make that request. And if we do get it, we'll post it in the show notes so that if anybody wants to see it, they'll be able to review that as well. 

[19:05] When the CRA first came out with these proposals during the consultation period, one of the things that it introduced was this next idea, which is if the taxpayer received assistance from an accountant or a lawyer regarding the subject matter of the VDP, the taxpayer was required to include the accountant or lawyer's name in the voluntary disclosure application. 

[19:26] And so what we see now in the new information circular is that the CRA seems to have backed off of that just a little bit. And so it now says at paragraph 44, and I'll quote, "Where a taxpayer received assistance from an advisor in respect of the subject matter of the VDP application, the name of that advisor should generally be included in the application." 

[19:47] And so it seems like in the initial proposal during the consultation period, it was a requirement. They've backed that off a bit. But that is a really significant move as part of these new changes to the Voluntary Disclosures Program that the CRA is actively taking a step to try to identify tax professionals that were involved, I guess, at the time of filing. 

[20:08] So what we see is that, we see that the Voluntary Disclosure Program is changing and, like I said, reading in-between the lines that this is becoming...The CRA has always used the Voluntary Disclosures Program to collect data and to use that in the course of its other audit. 

[20:23] That has been the case for as long as I can remember. But this seems to be a real change in terms of, and you mentioned this, I think, before, using the voluntary disclosure more as a weapon than it has been in the past. 

[20:35] So let's move on to the next section. And in this next section, we're going to discuss the uncertainty that will result from the changes, why the uncertainty will lead to more voluntary disclosure disputes and litigation in our opinion, and the specific types of new voluntary disclosure disputes and litigation that we're going to expect to see. 

[20:53] Now, the only way to get into that or to provide listeners with an understanding of that is to understand the discretionary nature of voluntary disclosures and voluntary disclosure decision-making. 

[21:05] Obviously, that's not something we can dive too deeply into this podcast. But why don't you give us a bit of a high-level overview of discretionary decisions of the CRA and how that impacts the Voluntary Disclosures Program? 

Yoni: [21:18] Sure. So the Income Tax Act gives the minister a broad power to cancel penalties and interest, and it doesn't impose any requirements or restrictions on the minister's power. Instead the minister can determine in what circumstance it will cancel penalties and interest. And we generally refer to this as the "minister's discretionary power." 

Peter: [21:38] So basically, that was Parliament's intention at the time it drafted the legislation. So in the income tax side under 223.1, the Parliament intentionally gave and wanted to give the minister this broad power to make these types of decisions and recognized the CRA as the experts to make these decisions or the best-placed experts to make these decisions as opposed to the court. 

[22:01] So it's a very different type of power and discretion that the CRA has in these circumstances as opposed to what we see in general substantive tax disputes. 

Yoni: [22:11] And so that power is so broad that the minister can establish its own process and criteria for determining the relevant facts and information when considering to exercise its discretion to cancel the penalties and interest. 

[22:25] And so under this power, the minister has the authority to set out specific requirements for qualification and the guidelines for how and when the minister will consider exercising her discretion. 

Peter: [22:35] So the way I always look at that when I read that is the CRA has the ability to a large extent, not to complete extent but to a large extent, to set the rules of the game. It's our ability to dispute that or overturn these types of decisions in some cases have to happen within the rules that the CRA sets out, i.e. the information circular to a large extent. 

Yoni: [22:57] And so a taxpayer can't appeal the minister's discretionary decision to the Tax Court. As you said, with any other substantive tax issue, that appeal would be to the Tax Court. Instead a taxpayer can only challenge a discretionary decision by applying to the federal court for judicial review of the minister's decision. And so the federal court will review the decision to determine whether it was reasonable. 

[23:20] And generally speaking, the law does not require that the minister make the right decision, only that the minister make a reasonable decision. 

Peter: [23:28] Just to be clear, that's in respect of the decision to accept or deny the voluntary disclosure. Whether the reassessment is correct is a different issue. And in many cases, that can be appealed to the Tax Court of Canada, but the decision to accept or deny the voluntary disclosure is a discretionary decision of the minister that must be appealed to the federal court. 

Yoni: [23:50] And so the question then is, "What is a reasonable decision?" 

Peter: [23:53] And there's lots of litigation and case laws surrounding this. And so a reasonable decision was defined in Dunsmuir as, "A decision that falls within a range of possible acceptable outcomes, which are defensible in respect of the facts and the law." 

[24:06] So "defensible in respect of the facts and law" means that the federal court cannot consider the facts and the law that were not before the minister's decision-maker. And this a problem that we see happen a lot in voluntary disclosures in which we get involved at the later stages, so at the federal court stage. 

[24:24] So in other words, taxpayers or professionals that don't submit the appropriate facts and evidence at the earlier stages can't start to raise those at the judicial review stage. So when evaluating the minister's decision, the federal court is restricted to the same facts and the law that were available for the minister to consider. Essentially, the record is set based on what's happened at the earlier stages. 

[24:50] And also, the minister's decision must only fall within a range of possible acceptable outcomes. And so what this means is that the federal court cannot reweigh to a large extent the relevant facts or substitute its own judgment for the minister decision-maker's judgment. 

Yoni: [25:08] So it's a pretty high bar to have a federal court find that a decision is unreasonable. 

Peter: [25:13] And frankly, that's the way Parliament intended it and that's the hurdle that taxpayers need to go through if appealing in the federal court. 

[25:21] So when we talk about this high bar, we've been referring to the subjectivity that's part of this, we're calling it the new Voluntary Disclosures Program or the changes that are going to be in effect after March 1st, 2018, we quickly realize that the new Voluntary Disclosures Program is going to require the voluntary disclosure officer to determine whether the taxpayer's voluntary disclosure falls under the General Program or the Limited Program. 

[25:47] And again, as we've been saying throughout, this is going to create a significant amount of uncertainty for taxpayers, because it's going to require these voluntary disclosure officers to make determinations about the taxpayer's intent.

Yoni: [26:00] And the new IC that sets out the Voluntary Disclosure Program lists several situations that would lead a voluntary disclosure officer to conclude that a taxpayer's disclosure should be under the Limited Program. And we'll list some of those from the IC now. The first is charging and collecting but not remitting GST. 

Peter: [26:22] That's black and white, right? There's going to be no question about that. 

Yoni: [26:26] There's not a lot of subjectivity to that analysis. 

Peter: [26:29] Right, exactly. 

Yoni: [26:30] Second, if the taxpayer took efforts to avoid detection. Third, if a disclosure is made after CRA makes an official statement that the CRA is focusing on a specific compliance category. Fourth, if the taxpayer's actions amount to gross negligence. Fifth, if the taxpayer is a corporation that had at least $250 million in revenue in at least two of the last five fiscal years. 

[26:53] Sixth, if the dollar amounts are high. Seventh, if the number of noncompliance years is significant. And eighth, if the taxpayer is a sophisticated taxpayer. 

Peter: [27:04] And so we were saying, "I think the only black-and-white one is the first one. And after that, it all becomes an exercise in subjectivity." And so what that's going to do is it's going to require a significant amount of analysis on the VDP officer's part to determine what constitutes efforts to avoid detection. What are high dollar amounts? 

[27:25] We've seen this in other tax disputes in terms of gross negligence disputes, primarily in terms of, "Is the noncompliance significant and what that means. Is it significant to the taxpayer's other income or is there some objective significant standard?" 

[27:42] And I think we're going to start to see that again here. What makes a taxpayer sophisticated? That's obviously another area open to argument. And when do a taxpayer's actions amount to gross negligence? Which there's so much case law on that point that will help guide us, but to what extent is the CRA going to rely on that and is the CRA going to make that assessment objectively? 

[28:06] The information circular also states that that list, the things that you were just listing off, is not exhaustive. And so therefore, the voluntary disclosure officers are going to have the power to categorize a taxpayer's voluntary disclosure as limited in other circumstances as well. 

[28:21] And that doesn't surprise us entirely. You don't want an information circular which pigeonholes a voluntary disclosure officer. But at the same time, it's important to have some element of objectivity to have taxpayers understand what is going to constitute a limited program voluntary disclosure and what isn't. 

[28:39] And again, if we haven't said it explicitly, the reason why this is important is because the filing requirements, the relief granted in these appeal restrictions, are so significant. 

[28:52] And these determinations that the CRA is going to make about whether a voluntary disclosure falls under the Limited Program are going to have significant economic consequences, and as we were saying, may impact the taxpayer's ability even to appeal the correctness of the assessment. 

[29:10] I think that's a good place to wrap up part one of our discussion relating to the CRA's changes to the VDP. Join us on the next episode of Canadian Tax Insights, where we'll continue our discussion about the uncertainty that the new voluntary disclosure changes will bring and why we expect more VDP disputes.

[29:25] We'll discuss the new types of VDP disputes that we expect to see and we'll speak with Mac Killoran to get a CPA's perspective on how the changes to the VDP will impact his and other accounting practices. 

[29:37] [background music] 

Peter: [29:37] We'll see you on the next episode of Canadian Tax Insights. 

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