Can an Executor Make a Voluntary Disclosure in Canada for the Deceased?

You are winding up an estate and you find income the person never reported, or returns they never filed. You are now worried about what the estate owes and whether you are exposed. The CRA's Voluntary Disclosure Program, or VDP, is one route to look at.

This article explains the VDP rules that generally matter. The program materials do not set out special steps for estates in the way described here, so how it works for an executor depends on the facts and is worth confirming with a lawyer or accountant.

This article covers Canadian federal tax law, which applies in every province.

What the VDP does

The VDP lets a taxpayer come forward to correct errors or omissions, such as unreported income or unfiled returns. If the application is accepted, the CRA may give penalty and interest relief and will not refer the disclosed matter for criminal prosecution. The tax itself must still be paid in full.

Current rules apply to applications received on or after October 1, 2025.

Conditions that matter for an estate

• The application must be voluntary and complete, with all supporting documents.
• It must involve interest, penalties or both.
• It must include information at least one year past the filing due date.
• It must include payment of the estimated tax owing or a request for a payment arrangement.

A disclosure is not voluntary if an audit or investigation has been started against the taxpayer or a related taxpayer for the disclosed information. Situations generally not eligible include applications that produce a refund or no tax or penalties owing, requests for relief on penalties or interest already assessed, and insolvency for the years involved. If the estate is short of funds, get advice early.

Relief and how far back it goes

Unprompted applications normally receive 100% relief of the applicable penalties and 75% relief of the applicable interest. Prompted applications normally receive 25% relief of the applicable interest and up to 100% relief of the applicable penalties. Prompted generally means the CRA has already identified a specific error, set a deadline or received third-party information.

The legal basis is subsection 220(3.1) of the Income Tax Act, and the request must be made on or before the day ten calendar years after the end of the taxation year. Older years may get reduced or no relief.

Documents, signatures and payment

An application consists of a completed, signed Form RC199, all returns, forms and schedules needed to correct the non-compliance, and payment (or a request for a payment arrangement) for the estimated tax owing. Supporting records generally cover the most recent six years, or ten years for assets or income located outside Canada. Years with no errors or omissions need not be included.

If a representative submits for the taxpayer, both the taxpayer and the representative must sign. The representative must be authorized on file with the CRA, or authorization documents must be included, and the name of any adviser who helped must be included. Who signs for a deceased person is a question for your lawyer.

If the estate cannot pay in full, you can ask for a payment arrangement, but approval is not guaranteed.

What to do next

• Find out whether the CRA has contacted the deceased or the estate, or started any audit.
• Collect the deceased's records for each affected year, including foreign assets if any.
• Ask a lawyer or accountant how the VDP fits the estate and who must sign.
• Hold off on distributing assets until you know what may be owed.
• Consider an anonymous, non-binding discussion with the CRA first.

An anonymous discussion is not an application. The CRA may audit any information you provide, and if it finds fraud or misrepresentation, an assessment may cover any year.

Frequently asked questions