[2] In 2015, Mr. Grewal was accepted into the Canada Revenue Agency’s Voluntary Disclosure Program (VDP). The VDP was introduced to encourage taxpayers to disclose inaccuracies or omissions in past filings voluntarily. It provides a basis on which the Minister may exercise the discretion conferred by subsection 220(3.1) of the Income Tax Act to waive or cancel any penalty or interest otherwise payable under the Act.
[3] At the relevant time, the CRA’s guidelines for operation of the VDP were set out in the CRA’s Information Circular IC00-1R4. It set out four conditions for a valid disclosure to the VDP. Among them was the condition that the disclosure be "“complete”—"that it provide "“full and accurate facts and documentation for all taxation years or reporting periods where there was previously inaccurate, incomplete or unreported information relating to any and all tax accounts with which the taxpayer is associated”" (IC00-IR4, 35). A taxpayer accepted into the VDP was required to pay any additional tax owing as a result of the information disclosed, together with interest, but could expect to be "“granted protection against penalties and possible prosecution, regarding the amounts included in the disclosure”" (IC00-IR4, 51).
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