Skip to main content
Contact us

VDA & Mitigation Services

Rely on the experts to determine the correct steps forward for your business

 

 

Voluntary disclosure agreements (VDAs) can be an effective way to mitigate prior period sales tax exposure. But they aren't right for every company.

A voluntary disclosure agreement (VDA) is a legal means for taxpayers to self-report back taxes owed for income, sales, property, and other types of income or capital.  In exchange for voluntarily reporting the tax due, states generally grant a waiver of penalty and also a limited look back (generally 3-4 years) potentially reducing the tax due significantly as compared to an audit.  If back taxes are not disclosed, but are instead discovered through an audit, the tax payer is at a disadvantage and will end up being assessed various penalties plus interest plus all historical tax due.

A VDA sounds perfect right? Well, not always. There are other several qualifications that have to be met to participate in a VDA and they aren't always the best way forward for every business.

The nature of your tax exposure and the specific program in place by the state will dictate which program is best for you.  TaxConnex® has navigated hundreds of VDA’s and Amnesty Programs with the end result being the successful reduction of client tax liabilities and penalty payments.

As part of our service, TaxConnex® will assist with the following:

  • Identification of the appropriate program for you to participate
  • Negotiation of a limited look-back period and penalty waiver on an anonymous basis
  • Upon acceptance of the agreement, preparation of the appropriate paperwork and tax returns to be filed with the taxing jurisdiction
  • Monitoring the progress through voluntary disclosure consulting and the resolution phase

Ready to rely on the experts to conquer the chaos of sales tax? Level up your sales tax management by working with TaxConnex!

Get in Touch →

 

 

Level Up side CTA

 

 

 

Contact TaxConnex® Today.

Learn more about the TaxConnex® Difference, and how we help businesses like yours to reduce the stress and anxiety of managing sales tax. 
 When you are in clean-up mode, you need action and people that respond to your needs. You need good people who do things once, do it right, and it is done; that’s TaxConnex.
Prior to working with TaxConnex we didn’t know that a VDA was an option. The VDA process can be terrifying but working with TaxConnex alleviated a lot of stress… With a VDA, we were able to gain a limited look back period that saved us from having to pay many more years of back owed taxes. With the help of TaxConnex, we were able to save a lot of money!
 The number one benefit we’ve received from working with TaxConnex is removing our risk with sales tax. As a SaaS platform there are many complications, add to that the 2018 Wayfair decision and things got even more complicated, but we can rely on TaxConnex to help us determine our nexus and comply.
Fred Brasch, Fractional CXO
Controller at SaaS Company
Dinah McQueen
 

VDA & Mitigation Services FAQs

  • What is a Voluntary Disclosure Agreement (VDA)?

    A voluntary disclosure agreement (VDA) is a legal means for taxpayers to self-report back taxes owed for income, sales, property, and other taxes. TaxConnex can assist with a VDA in relation to sales or telecom tax. 


     

  • How do I know if my business needs a Voluntary Disclosure Agreement?

    If your business has established sales tax nexus in a state but has not registered, collected, or remitted sales tax, a VDA may help reduce historical liability. A nexus review is often the first step in determining whether a VDA is needed. 

  • Can a Voluntary Disclosure Agreement reduce penalties?

    Yes. 
    Many states offer penalty relief through a voluntary disclosure agreement. While each state's program is different, a VDA can often reduce the number of years subject to tax and eliminate or significantly reduce penalties. 


  • What is the difference between a Voluntary Disclosure Agreement (VDA) and a sales tax amnesty program?

    A Voluntary Disclosure Agreement (VDA) is an agreement between a business and a state tax authority that allows eligible businesses to voluntarily resolve prior sales tax liabilities before a state initiates contact. A sales tax amnesty program is a limited-time program offered by a state that allows eligible businesses to resolve prior tax liabilities under term established by the state.  The main differences between the two are:
    - Amnesty programs are a limited time offering
    - A VDA cannot be made if the state has already contacted you for lack of collection of sales tax.  If an amnesty program is established after you've been contacted, there is a potential you can still qualify.  

  • Can software identify whether I need a VDA?

    Not completely.
    Software can help identify where you may have established nexus, but it cannot determine the best mitigation strategy with state tax authorities. Evaluating historical exposure and selecting the right approach often requires experienced sales tax professionals.