The Department's Voluntary Disclosure Program is administered through the Nexus and Discovery Unit which is part of the Office of Field Audit. The Department's position on Voluntary Disclosures is determined by the individual fact pattern for each applicant. The following guidelines apply to Voluntary Disclosure applicants:
- In order to be considered for the Voluntary Disclosure Program, contact for tax purposes by our Department must not have been made prior to the applicant initiating the disclosure process.
- Nexus Determination - If nexus exist for Sales and Use Tax or Income Tax purposes the Department will generally agree to limit prior period exposure to three (3) years or to the date nexus was established, whichever is the lesser period.
- If the taxpayer has been collecting sales taxes from customers and not remitting the tax, the Department will extend the prior period exposure to include periods for which this type of liabilities exists.
- The department will agree to waive all penalties provided the tax and interest due is paid once the total amount due is determined.
- Exceptions to this general rule include where a taxpayer has collected the tax from their customers but has not remitted this tax to the State.
- These cases will be reviewed on a case by case basis.
Taxpayers with liability in more than one state should consider applying for multi-state voluntary disclosure through the Multistate Tax Commission. More information about the MTC’s Voluntary Disclosure Program and the application for Multi-state Voluntary Disclosure are available at the MTC Voluntary Disclosure site.