Colorado Voluntary Disclosure Agreement

If you`re a business owner in Colorado, you may have heard of the voluntary disclosure agreement (VDA). This program allows businesses to come forward and disclose any past tax liabilities without fear of penalty or prosecution. This can be a great option for businesses that have fallen behind on their taxes or have made errors in their filings.

So, what exactly is a voluntary disclosure agreement? It is a written agreement between a business and the state of Colorado that allows the business to voluntarily disclose any past tax liabilities that they may have failed to pay or improperly reported. In exchange for disclosing these liabilities, the state agrees not to impose penalties or pursue criminal charges against the business.

The benefit of participating in the VDA program is that businesses can avoid potentially hefty penalties for non-payment or underpayment of taxes. In addition, it can provide peace of mind knowing that any past tax liabilities have been addressed and resolved.

To participate in the VDA program, businesses must meet certain requirements. First, they must not have received any communication from the Colorado Department of Revenue about the tax liability in question. Second, the liability must be more than three years old and the business must not have previously disclosed it. Finally, the business must agree to pay the tax owed within a certain timeframe.

It`s important to note that participating in the VDA program does not guarantee that a business will not face additional tax liabilities or penalties in the future. However, it can be a helpful tool for businesses that need to get back on track with their tax obligations.

If you`re considering participating in the voluntary disclosure agreement program, it`s important to work with a tax professional who can guide you through the process and help ensure that you meet all of the necessary requirements. With the right support, the VDA program can be a valuable tool for businesses looking to address past tax liabilities and move forward with confidence.