Dhaliwal, a former two-term MP for the federal Liberals, had been acclaimed as a candidate last October, but a month later he appeared in court on the charges under the Federal Income Tax Act.
The Liberal Party said earlier Friday it was reviewing Dhaliwal's candidacy in Surrey-Panorama after learning about the charges on Wednesday, but Dhaliwal said he wasn't pushed by the party to quit.
Earlier this week, Dhaliwal told a local radio station he made a mistake in trusting other people to run the company where he and his wife are listed as the sole directors.
But he has said his taxes on his own company and his personal taxes are up to date.
"When I look at those charges that are in front of the court, they are not (about) shirking my physical responsibility, but they are because of the difficulty obtaining information from other sources," Dhaliwal said at the Friday news conference.
Dhaliwal said he is taking full responsibility and is working to resolve the situation
He said politicians should live up to the highest standards of behaviour and he doesn't want to detract from the issues in the May election.
"I tell you right now that people have to be brave enough, and I'm brave, my family is brave enough, to come out today to be accountable to the people and the media and that's why I'm standing in front of you not shirking my responsibility."
Dhaliwal, who sat as a federal MP for two terms, said he learned of the charges in late November.
He wouldn't answer questions about why he didn't tell the party sooner about the charges, but said his lawyer had hoped to have the matter dealt with quickly.
The party said the decision for the review was taken at Clark's request.
After Dhaliwal announced he was withdrawing, party president Sharon White thanked him for his "commitment to the party and our leader".
White said the party will now consult with the Surrey-Panorama constituency association about when to hold a new candidate selection meeting.
“We will be moving ahead soon with nominations throughout Surrey and look forward to announcing our full Surrey team,” said White.
Surrey-Panorama is currently heldby Minister of Children and Families Stephanie Cadieux, who will stay with the party but run in a nearby riding.
Dhaliwal ran unsuccessfully for the federal Liberals in the riding of Newton-North Delta in 2004, but returned two years later, winning a seat in Parliament for two terms before being defeated by the federal NDP's Jinny Sims, a past president of the BC Teachers’ Federation.
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