A voluntary disclosure agreement is a formal contractual agreement between the state and the taxpayer in which the state agrees to limit the retrospective period for taxes due and waive penalties (and sometimes interest) on taxes paid. If the taxpayer is liable in more than one state, they may consider requesting voluntary disclosure in multiple states through the Multistate Tax Commission (MTC). For more information on the TCM Voluntary Disclosure Program and the multi-state voluntary disclosure request, please visit the TCM website. Interstate Tax Strategies has a proven model for working with countries to facilitate VDA settlement agreements. We work with your company to learn how to best reach states and how to minimize tax liability. Our multi-state sales tax techniques and knowledge have saved customers significant amounts of taxpayers` money through the VDA process. Contact us for a free and confidential conversation about your company`s tax situation VDA@salestaxstrategies.com. Short-term homeowners in Colorado may be able to use a Voluntary Disclosure Agreement (VDA). A VDA offers hosts the ability to proactively disclose tax obligations from the previous period in accordance with a binding agreement with the Colorado Department of Revenue. VDAs are proposed to encourage cooperation with state tax laws and may result in a waiver of some or all penalties and interest payments. Once the return of returns and incentives has been received, it will be reviewed to determine the terms of the agreement that the Department can offer to the taxpayer. The Department requests additional information or returns a signed agreement to the taxpayer or taxpayer`s representative for acceptance and signature.
VDA settlement agreements are typically conducted anonymously through third parties such as Interstate Tax Strategies. This ensures that the identity of the taxpayer is not communicated to the state until the agreement has been formalized and all parties have accepted the settlement. VDA settlements must be made before the state contacts your company, so it`s important that you start assessing your company`s potential liability as soon as possible. The minimum requirements for each agreement include filing tax returns for each taxpayer once the agreement has been concluded. The process begins with the upload and/or review of these documents by the taxpayer and/or his/her representative. Confidentiality rules are discussed in sections 6 and 7 of the voluntary disclosure procedures of several states. The Commission shall treat the identity of the applicant as confidential during the voluntary disclosure procedure. The Commission will only disclose the identity of an applicant to a State after the latter has concluded a visa agreement with that State. Until such an agreement is signed, the applicant shall be known to that State only by his or her voluntary disclosure file number assigned by NNP staff. The Commission shall not transmit the VDA or any of its conditions to other States. An applicant is not required to disclose information that would reveal their identity before running a VDA. A secure email is available to send confidential taxpayer information.
NNP employees do not process requests for voluntary disclosure if the good faith estimate of the tax to which a state is entitled for the retrospective period is less than $500. Taxpayers with a minimum tax liability should pay this obligation directly to the state when filing an initial tax return. The retrospective period includes previous full tax reporting periods, for which a taxpayer requesting voluntary relief from disclosure must generally file returns and pay tax payable tax plus interest in exchange for the government`s waiver of tax liability for periods prior to the retrospective period and penalties. The review period also includes the current incomplete tax return period, whose tax return must be submitted in a timely manner and taxed on time. For more information about the review period, see “What is the review period and how is it determined?” in the Frequently Asked Questions. For a list of retrospective periods for participating states, see “Retrospective periods for States participating in the Nexus National Program” and “Sales/Use Tax Retrospective Periods for Taxpayers with an Economic Connection Only”. A taxpayer with a potential tax burden in more than one state will find that this service is faster, more efficient and more cost-effective than approaching each state separately. There is no charge for the taxpayer to participate in the CDM. State sales/use tax and income tax/franchise tax (including HAWAII GET and Washington B&O taxes) are the types of taxes that are typically subject to a Voluntary Disclosure Agreement (VDA). Previous contact between a state and the taxpayer about a type of tax disqualifies the taxpayer from participating in the voluntary disclosure of that type of tax. “Contact” includes filing a tax return, paying taxes, or receiving a request from the state regarding the type of tax. Voluntary disclosure procedure in several States, paragraph 5.2.
When entering into a VDA with the state, the taxpayer is required to submit returns, pay the tax due after the tax returns, and register (if necessary) with the state in order to waive the penalty for the duration of the review period, as provided for in the VDA. Interest is due on unpaid tax obligations incurred during the retrospective period, unless the State expressly waives it. When submitting documents for the self-disclosure program, please use the appropriate address, which is based on the type of submission. Send directly to the attention of Samwel Khakame. Emails are also accepted. Whether you choose to offer short-term rentals through a marketplace like Airbnb or directly to the consumer, you open the door to tax liability at the national and local levels. Because tax revenues are a major source of local funding, tax authorities are becoming increasingly aggressive in their efforts to identify individuals and businesses that do not comply with tax laws. Failure to register with tax authorities in a timely manner and fail to file short-term rental tax returns in Colorado can result in late fees, interest payments, and, in extreme cases, lawsuits. Colorado Department of Revenue at attention: Samwel Khakame 1375 Sherman Street, Room 634 Denver, CO 80203 Airbnb and HomeAway/Vrbo have changed the way vacationers travel. More and more customers are choosing to rent private homes instead of booking hotels. With a plethora of popular destinations like Rocky Mountain National Park, Steamboat Springs, and Crested Butte, Centennial State offers potential short-term tenants the opportunity to earn extra income and meet new people. .