Voluntary Disclosure
Why Voluntary Disclosure Matters
Unreported sales tax, missed filings, or unregistered business activity don’t stay hidden — they compound risk. With expanding interstate sales, e-commerce, and increasingly aggressive nexus enforcement, many businesses unknowingly create tax exposure across multiple states. Once a state initiates contact, penalties, interest, audits, and reputational damage can escalate quickly.
Voluntary Disclosure Agreements (VDAs) allow you to step forward before enforcement begins and regain control of the outcome. At BlancPeak, our New York–based CPA team manages the process discreetly, negotiates reduced penalties and limited look-back periods, and restores compliance across jurisdictions. The result is contained exposure, predictable resolution, and a clean path forward — without waiting for the state to come knocking.
What's Included
- Confidential preparation and filing of Voluntary Disclosure Agreements (VDAs)
- Negotiation of reduced penalties and limited look-back periods
- Direct representation with state tax authorities — we handle all discussions
- Coordinated multi-state VDAs where obligations overlap
- Ongoing compliance strategies to prevent future exposure
We Help With
- Unfiled or underreported sales and use tax liabilities
- Nexus-triggered exposure from operating across multiple states
- Extended periods of unregistered activity creating ongoing risk
- Concerns about reputational impact from state disclosure
- Uncertainty around complex multi-jurisdictional compliance rules
Explore More Audit Support Services
- IRS Audit Representation — defend your interests in front of the IRS or state auditors
- Back Taxes Help — file missing returns, reduce penalties, and stop collections
- Managed Audit Programs — cooperate with state programs while protecting your interests
- Refund Recovery — recover overpaid sales and use taxes
FAQs: Voluntary Disclosure Agreements
Voluntary disclosure agreements allow you to address past tax exposure before state enforcement begins. These FAQs explain how the process works, confidentiality considerations, multi-state exposure, look-back periods, penalty relief, and how to stay compliant after a VDA is completed.
Is the voluntary disclosure process confidential?
Yes. Confidentiality is one of the core advantages of a Voluntary Disclosure Agreement. When initiated through an experienced CPA, the process begins anonymously. Your identity is not disclosed to the state until terms are negotiated and accepted. This allows you to assess exposure, negotiate conditions, and make informed decisions without triggering enforcement action. The approach is particularly important for businesses concerned about reputational risk or sensitive client relationships.
What if I owe taxes in multiple states?
Multi-state exposure is increasingly common, especially for e-commerce and service-based businesses. Nexus rules can create obligations in states where you may not realize you have filing requirements. We coordinate VDAs across multiple jurisdictions to ensure a consistent strategy and prevent states from acting independently. By managing the process centrally, we often secure aligned look-back periods and penalty relief while minimizing overall exposure.
How far back will states require me to file?
A key benefit of a VDA is the limited look-back period. While audits can reach back many years, VDAs typically require filings for only three to four prior years, depending on the state and circumstances. This limitation can substantially reduce liability and prevent older periods from being reopened. Without a VDA, there is often no cap on how far back the state may assess tax.
Can penalties really be reduced or eliminated?
Yes. States offer VDAs to encourage voluntary compliance, and penalty relief is a common incentive. When disclosures are made proactively and in good faith—before the state initiates contact—penalties are often waived or significantly reduced. We position each disclosure carefully, ensuring it meets state criteria and is presented in a way that maximizes the likelihood of favorable treatment.
What happens after the VDA is complete?
Resolving past exposure is only part of the process. Long-term compliance is essential to protect the benefits of the VDA. After completion, we help implement procedures to maintain ongoing compliance, including reviewing sales and use tax processes, improving reporting systems, and monitoring nexus activity in additional jurisdictions. The goal is to prevent future issues and ensure the business remains in good standing moving forward.
