Understanding Voluntary Disclosure Agreements

Most states have voluntary disclosure programs that are designed to encourage the payment of many different types of back taxes. These rules vary state by state, and certain states may require the filing of tax returns for a different number of prior periods, and some also have rules on the abatement or reduction of penalties and interest. In addition, there are different programs for individuals and business entities, which may help to limit prior income, franchise, sales, use, and other tax exposures and penalties. Finally, the states share taxpayer information with other jurisdictions, like the Federal government or localities.

Areas of Assistance

Quantify your exposure

Approach taxing jurisdictions anonymously on your behalf to negotiate agreements

Prepare registrations and historic returns required by various programs

File refund claims for previously filed tax returns favorably affected by any new agreement

Determine taxable and exempt transactions

Request rulings from states when clarification of taxability is needed