Filing your back taxes puts you "in" integrity, ergo, you'll sleep at night

Bravery, Responsibility, Integrity and Tenacity.

I'm borrowing the new Britannia HS BRIT acronym this morning because it definitely applies to anyone tackling a backlog of tax returns for a family.

Bravery
The act of starting anything requires a plan. Being willing to plan and execute something of this magnitude when you're this far behind, you're very brave.

Responsibility
Canadian are responsible for filing their own tax returns, and for understanding what those rules are. Not taking responsibility can be very expensive, could cost in penalties and interest if you owe tax, or in lost benefit programs. What programs could you lose out on? I can think of three right off the cuff but there's many programs that require the provision of Net income calculation. 
1) CPP, OAS, GIS top up for old age pensioners
2) Pharmacare
3) Premium assistance reduction on BC Medical plan premiums.
For sure your banker won't provide you with financing if your tax returns aren't filed and tax paid

Integrity
The loss of integrity that comes with non compliance can cause you to lose sleep. Being in integrity means sleeping at night. It's that simple. Out of integrity? You aren't sleeping.

Tenacity
Remember, when tackling a backlog of anything, it isn't going to take any less time than it would have taken if you'd done the work every year. If self-employed, your bookkeeping may take 4-5 hours a month. Multiply that by 60 months for five years backlog, and you're looking at a significant commitment in time, and the cost of assistance by someone qualified to help with the planning, organizing and execution of compliance.
Tenacity is sticking with it.

Catching up may take a few months.
You may choose to request a voluntary disclosure if you meet the criteria. You may need legal assistance. It just got more difficult to communicate with Canada Revenue Agency about disclosure as they no longer accept phone calls due to the volume of work in the system.

It's necessary to complete a form, send it in and expect, that if it's not completed correctly, to get the whole thing back in the mail. In the mean time, if you receive any demands to file, your ability to disclose voluntarily is lost.

Be prepared to be complete
It's necessary to meet all four criteria, especially to estimate how much is owed, and be prepared to pay what you owe.

Oh yes, you only get one kick at the can, so be prepared to deal with not only your taxes, but your GST/HST, and payroll disclosures.

Penalties for non compliance can be significant
An approved voluntary disclosure will eliminate all the penalties but only if you qualify. Voluntary disclosure won't forgive interest. But there is a Taxpayer Relief program that in limited circumstances may be helpful.

For more information about voluntary disclosures
http://www.cra-arc.gc.ca/gncy/nvstgtns/vdp-eng.html

For more information about Taxpayer Relief
http://www.cra-arc.gc.ca/E/pbg/tf/rc4288/

For rates, dates, and penalty information, scroll down to the relevant links
http://www.taxdetective.ca/whatsnew2009.html