If you know you’ve fallen behind on your tax obligations and genuinely want to resolve your issues in good faith, then Georgia’s Voluntary Disclosure Agreement program might be a good resolution strategy for you.
Georgia’s Voluntary Disclosure Agreement allows taxpayers to willingly come forward to the Department of Revenue (“DOR”) about their back tax problems and resolve them voluntarily. This strategy helps potentially reduce your penalties and could limit the DORs compliance look-back period.
Not every taxpayer is eligible to go through this program, though, and you’ll want to carefully consider your options before taking this course of action. Here at Wiggam Law, our tax resolution team can help you decide if the Department of Revenue’s Voluntary Disclosure Agreement is right for you.
Key Takeaways
- Georgia’s Voluntary Disclosure Agreement offers recourse to taxpayers with unfiled returns or underreported taxes.
- Benefits – penalty waivers and limited look-back period.
- Requirements: You must be proactive. You’re ineligible if the DOR has already contacted you about the tax matter.
- How to get started – consult with a tax resolution specialist before applying for GA’s voluntary disclosure agreement to ensure that doing so is in your best interests.
What Is a Georgia Voluntary Disclosure Agreement?
The VDA program is offered by the Georgia Department of Revenue as a tax resolution strategy for individuals or businesses that have unreported taxes. This resolution allows the delinquent party to voluntarily come forward about what they owe with the purpose of seeking compliance and avoiding unwanted consequences.
Who is Eligible for the VDA Program?
If you’re a Georgia resident or business owner, then you could be eligible to apply for this program if you meet all the following criteria:
- You have unfiled or underreported tax liabilities due to the Georgia Department of Revenue.
- You have not received a letter from the Department regarding enforcement efforts related to the tax liability.
- You have remained compliant with all other tax obligations that aren’t mentioned as part of the VDA.
You can apply for a VDA for multiple types of tax at the same time, but you must note all of them on your application. If you apply for one type of tax (sales tax, for example) and then the DOR discovers that you have other state delinquencies, they will deny your application.
If you think you’re eligible and you’ve already discussed your situation with a tax resolution attorney, then your next step will be to fill out a VDA application and submit it to the Georgia Department of Revenue. This agency has the ultimate authority to determine your eligibility and approve or deny your request.
Who Does Not Qualify for the VDA Program?
As a result of the eligibility requirements, individuals or businesses that the Georgia DOR has already contacted about the tax debt they want to disclose will not be eligible to apply for this type of relief. When a case is open on the unpaid or underreported tax, the VDA is no longer an option. This is because your disclosure is no longer considered ‘voluntary’ since the DOR knows about the violation and contacted you about it.
If you don’t qualify for the GA VDA, then you still have other options. Consulting with a legal tax representative can help you understand your options, decide how to resolve your situation, and negotiate with the GA DOR.
When to Use Georgia’s VDA Program
You should consider using Georgia’s VDA program if you’re seeking to resolve your tax issues without triggering collection efforts. What is VDA useful for? This program is best for individuals and businesses that have unfiled sales tax, income tax, or other missed state filings. It’s also useful for taxpayers who have underreported their tax liabilities on any state returns.
Consider making a VDA if you want to resolve your tax problem while avoiding penalties, audits, and other consequences.
When to Seek Help from a Tax Professional
It’s best to consult with a legal tax professional if you’re considering utilizing the VDA program for individual or sales tax reasons. Having a legal advocate by your side helps ensure your rights are upheld during any communications and negotiations with the state. The right tax attorney will make sure your disclosure is accurate, even if you have complex, multi-year, or high-dollar issues.
If you want to pursue your VDA anonymously, then a legal tax professional can act as your representative.
Benefits of Using Georgia’s VDA
Georgia’s VDA program offers individual taxpayers and businesses the opportunity to self-correct and pivot into a brighter, more compliant future by addressing ongoing tax issues. Check out the benefits:
Peace of mind
Once you make a disclosure, you don’t have to worry about the state coming after you. The VDA is a solution to tax debt and eliminates the threat of escalating collection efforts.
Limited look-back period
One of the greatest benefits of this program is that the DOR’s look-back period will be limited. Usually, the DOR will only reflect on the past three years with this type of disclosure. However, if you collected taxes from other parties, or other outstanding issues were identified during the DORs review, the lookback period could extend over the relevant time frame. For example, if you’ve been collecting GA sales tax for five years (but not paying or filing), the lookback period will typically be five years.
In contrast, if you don’t make a disclosure and the state comes after you, they could look back over a much longer period of time, and of course, you’ll face penalties for all of it.
Penalty waivers
Another huge advantage of the VDA is that taxpayers could have other penalties waived by willfully disclosing their mistakes. Since penalties stack up fast, this advantage can amount to serious savings. For instance, a failure to pay sales tax penalty alone can be 25% of the tax owed.
Who Commonly Uses the Voluntary Disclosure Agreement (VDA)
Here are some of the types of taxpayers who may need to use the VDA program:
- Individuals with unfiled state tax returns.
- Businesses with unfiled sales tax returns.
- Employers with unfiled payroll tax returns.
- Individuals or businesses that underreported the tax on a state return.
- Out-of-state businesses and non-residents with tax obligations in Georgia
- Taxpayers who want to avoid penalties and the increasing escalation of their tax situation
If you have unfiled returns in multiple states (generally, this applies to businesses that collect sales tax in multiple states), you can make a multi-state disclosure that includes Georgia using the Multistate Tax Commission’s (MTC) Voluntary Disclosure Program.
Are You Considering Applying for a GA VDA?
If you’re considering applying for a Voluntary Disclosure Agreement with Georgia’s Department of Revenue, then you don’t want to go at it alone. You’ll maximize your chances of securing a favorable outcome if you consult a legal tax professional with experience resolving Georgia state tax problems.
Here at Wiggam Law, we can help you explore your eligibility for GA’s VDA program and other possible sources of tax debt relief. In general, the sooner you act, the more likely the DOR is to be lenient on you.
Our tax resolution team has helped our clients save over $2.7 million collectively in penalties, interest, and other tax debt. We’re ready to aggressively advocate for you and fight for the best possible resolution in your tax case. We’ll help you strategize on how to best present your case and negotiate a deal.
Schedule a case review with our team now by leaving your contact information on our online form or calling us at (404) 233-9800.
FAQs: Georgia’s Voluntary Disclosure Agreement Program
Do you have more questions about Georgia’s voluntary disclosure agreement program? Before presenting your case to the Georgia Department of Revenue, it might make the most sense to run your circumstances by a tax resolution attorney. The right lawyer can provide personalized legal advice that considers your situation’s unique facts.
That said, we’ll go over some generalized answers to some of the most frequently asked questions about Georgia’s voluntary disclosure agreement program below.
How long does the VDA process take?
On average, the VDA process takes several months to complete. It could take up to a year or longer if you have a complex case or your situation involves multiple states.
Can I apply anonymously?
The DOR accepts anonymous VDA applications, but you must identify your tax representative. This option may have additional risks or benefits, so talk with a tax attorney for details.
What taxes are covered?
The GA VDA program covers individual income tax, sales tax, withholding tax, net worth tax, and corporate income tax.
What is the lookback period?
Under Georgia law, the look-back period is usually a minimum of three years. For sales and use or withholding taxes, the look-back period can be extended as far back as necessary to recover taxes that the taxpayer collected but did not remit.
What happens if I don’t follow through?
If you get started on the VDA process and later decide to back out, then the GA DOR has a massive incentive to pursue your account for collections. What’s more, the DOR will have a massive advantage since they’ll likely have a better understanding of what you owe based on the information you’ve provided.
If you don’t follow through, then you could wind up facing additional penalties, audits, and collection efforts. The DOR might also extend the look-back period, which is often limited when you seek out VDAs. This could result in you having to pay back your delinquent tax dating back further than you would with the VDA.
What if I also have unfiled federal tax returns?
Georgia’s program only covers state taxes. If you’re facing IRS tax issues as well, you may need to look into the IRS’s resolution options as well. The team at Wiggam Law can help you do both.
Resources:
https://dor.georgia.gov/voluntary-disclosure-agreements
