Voluntary Disclosure Agreements: Proactive Relief from Sales Tax Audits, Penalties, and Interest

• A Voluntary Disclosure Agreement (VDA) allows businesses to proactively disclose unreported or underreported sales tax liabilities to a state before an audit begins.
• In exchange, states typically offer limited look-back periods (usually 3-5 years), reduced or waived penalties, and sometimes interest relief.
• VDAs are ongoing programs, while tax amnesty programs are temporary and have broader eligibility but require full disclosure upfront.
• VDAs are best for proactive compliance, whereas tax amnesty is for limited-time cleanup.
• The VDA process usually starts when a business discovers unfulfilled tax obligations and seeks to resolve them before state enforcement.

Source: salestaxsolutions.us

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

---

---