Voluntary Disclosure Agreements

A Voluntary Disclosure Agreement (VDA) allows taxpayers to disclose a prior tax liability to the Texas Comptroller proactively. In return, the taxpayer receives the following benefits:

• Limited look-back period of four years, even if the business was not permitted (there is no four-year limitation on tax collected but not remitted)
• Depending on the circumstances receive a waiver of all regular 10% penalties and 50% fraud penalties
• Receive a waiver of interest on taxes voluntarily disclosed and paid that were not collected
• Avoid an unplanned audit

What to Expect

A Texas Tax Group ( TTG) consultant familiar with the tax rules, regulations, and policies relative to your business will review your records, uncover any prior tax liabilities, and initiate and manage the VDA process on your behalf.

VDA Example

View VDA Example

Let’s start by breaking down the potential audit liability for a non-permitted company that should have collected and remitted $10,000 in sales tax each year for the past seven years. If selected for audit by the Texas Comptroller, the total potential audit liability could be $119,000 ($70,000 in sales tax, $7,000 in regular penalties, $35,000 in fraud penalties, and approximately $7,000 interest).

Now let’s break down the potential liability if TTG were to manage the VDA process on behalf of the company before an audit. The total VDA liability would be $40,000 ($10k in sales tax per year, no interest, no penalties, and a 4-year look-back period). Therefore, the total potential liability is reduced from $119,000 (7-year look back plus penalty and interest) to $40,000 (four-year look back and no penalty and interest) if the VDA was accepted. The resulting savings would be approximately $79,000 .

Why Texas Tax Group

• TTG VDA specialists ensure compliance with the VDA program guidelines so that each VDA receives approval from the Deputy Comptroller. This compliance is critical since the Comptroller reserves the right to deny the waiver of penalty and/or interest or to void the agreement if the taxpayer does not adhere to the program policies and procedures.
  • TTG’s consultants and policy experts verify that all unpaid taxes are accounted for and reported. This reduces the risk of additional tax, penalties and interest on future audits of the disclosure period.
  • TTG’s Settlement Division has experience negotiating payment plans for unpaid taxes.
  • TTG’s Policy Experts are well versed with Comptroller rules, regulations, and policy and written over 5,000 private letter tax rulings while employed with the Comptroller
  • TTG’s team of 20+ former Texas Comptroller State Tax Auditors, Supervisors, and Tax Policy Experts have over 400 combined years of work experience with the Texas Comptroller’s office
  • TTG consultants have performed over 5,000 tax audits while employed as auditors by the Texas Comptroller’s Office and are familiar with the audit procedures used by the State
  • TTG has offices located in Houston, Dallas, San Antonio, and Austin