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 an VDA if they notify you first (e.g. sending a tax questionnaire).
- The National Nexus Program standardizes Voluntary Disclosure Agreements in multiple states to make it easier.
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Each State has their own 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.