There are several pitfalls that a company should follow when it has a voluntary disclosure agreement. The subject must come forward and request the VDA from a Member State before receiving requests, communications or audit notices from the State concerned. Some states limit these requests, communications or audit communications to the specific nature of the disclosed tax, while others extend it to all state-administered taxes. This is the most common misunderstanding about voluntary disclosure agreements. The key is that it is a „voluntary” confession… If the state contacts you on its own about certain tax breaches, the state does not see things as you voluntarily register. The best way to solve Nexus`s problems is for a VAT specialist to negotiate a voluntary disclosure agreement with the Treasury on your behalf. The process is quite simple. Your representative then calculates taxable debts, then negotiates an amended repayment period and reduced penalties in exchange for a new taxpayer`s contribution to the state. This legal agreement frees up your business and saves you a lot of money, time and resources. Lauren Stinson has more than 20 years of experience advising, planning and training clients on sales and usage tax issues, including process reviews, nexuses, exemption certificates and voluntary disclosure agreements. She is the founder and president of Windward Tax, a consulting firm specializing in navigating businesses through sales and enforcement of tax compliance laws and regulations.
Lauren is a certified member of the Institute for Professionals in Taxation (CMI). This is the highest level of professional performance in terms of revenue taxation and usage. A voluntary disclosure agreement is a legal agreement between a state tax authority and a company that acknowledges that it has not complied with its compliance obligations with respect to sales and usage taxes. The voluntary disclosure agreement will allow the company to make all necessary registrations within the state and fulfill all remaining tax commitments. At the end of the voluntary disclosure agreement program, the company has regular monthly, quarterly or annual reporting obligations with the government based on the volume of government activity. In voluntary disclosure agreements, most states will allow a company to estimate its past commitments, which will simplify the process. With a few exceptions, Excel calendars for calculating tax liabilities are accepted instead of filing all previous VAT returns. States are prepared to make these concessions to facilitate the process, as the main objective of states is to promote voluntary compliance with future and ongoing tax collection and reporting obligations. In short, the state is prepared to forego some formal revenues and even some to curb new taxpayers. If a company`s voluntary disclosure agreement or VDA is accepted, there are strict deadlines for obtaining all the benefits of the Voluntary Disclosure Agreement program.
Keep in mind that a voluntary disclosure agreement is a legal agreement between the company and the state. Therefore, there are very clear results that need to be provided by the company, as well as a rigorous schedule as to when these items should be made available. Like almost everything in revenue and usage tax, these deadlines vary from state to state, but an experienced VAT advisor will know these deadlines and will be assured that his client will meet them. Short-term homeowners in Wyoming can benefit from a Voluntary Disclosure Agreement (VDA). A VDA provides hosts with the ability to proactively disclose tax liabilities from prior periods, in accordance with a binding agreement with the Wyoming Department of Revenue. VDAs are offered to promote cooperation with state tax legislation and may lead to the abolition of some or all interest payments.