Question 1

What is a voluntary disclosure agreement in Florida tax compliance?

Accepted Answer

Voluntary disclosure agreement (VDA): an agreement between a taxpayer and the FL Department of Revenue (DOR) that allows the taxpayer to: voluntarily report unpaid taxes, pay the taxes owed (plus interest), and avoid or reduce penalties. The DOR: typically limits the lookback period (the number of years for which back taxes are owed: usually 3 years instead of the full statute of limitations), waives penalties (which can be significant: 10% per month up to 50% of the tax), and provides a structured payment plan if needed. The VDA: is available for: sales and use tax, corporate income tax, and other FL taxes.

Question 2

Who should consider a Florida voluntary disclosure agreement?

Accepted Answer

Consider VDA: businesses that have been operating in FL without collecting or remitting sales tax (nexus: the business has a physical presence or economic nexus in FL), businesses that have underreported FL taxes (discovered an error or omission in prior filings), out-of-state businesses with FL nexus (remote sellers with FL economic nexus: $100,000 in FL sales), and businesses that have acquired FL operations (the acquired business had outstanding tax liabilities). The VDA: is typically more favorable than waiting for the DOR to audit (the DOR audit: can look back further, impose full penalties, and assess interest from the date the tax was due).

Question 3

How does the Florida VDA process work?

Accepted Answer

Process: anonymous contact (the taxpayer or their representative contacts the DOR anonymously: to discuss the situation without identifying the taxpayer), application (the taxpayer files a VDA application: disclosing the tax types, periods, and estimated liability), negotiation (the DOR and the taxpayer negotiate: the lookback period, the amount of tax and interest, and any payment terms), agreement (the parties execute the VDA: the taxpayer agrees to register, file returns, and pay the agreed amount), and compliance (the taxpayer must: register with the DOR, file all required returns going forward, and make the agreed payments). The VDA: typically resolves the liability within 60-120 days.

Voluntary Disclosure Agreement Tax Compliance

Florida Voluntary Disclosure Agreement (Tax)

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