A Voluntary Disclosure Agreement is a process in which a company comes clean about not collecting or paying taxes when they should have (usually sales tax and corporate income tax). This helps to minimize penalties and the look-back period for paying back taxes. Without it, the tax agency will come after the company for the full amount and penalties. In fact, many States will not accept a VDA if they notify you first (e.g. sending a tax questionnaire).
See also:
- The National Nexus Program standardizes Voluntary Disclosure Agreements in multiple states to make it easier.
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The National Nexus Program Standardizes Voluntary Disclosure Agreements to Pay Back Taxes
Each State has a process administrating a Voluntary Disclosure Agreement to pay back taxes. The Multistate Tax Commission runs a program to standardize the VDAs and make it easier for companies to meet their tax obligations and pay back taxes.