taxes

Voluntary Disclosure Program

The Texas Comptroller of Public Accounts is committed to promoting taxpayer compliance with Texas tax law. In an effort to accomplish this objective, a Voluntary Disclosure Agreement (VDA) is available to taxpayers to report previously unpaid or underpaid taxes to the Comptroller’s office. The program provides a taxpayer with the opportunity to pay these taxes voluntarily, with relief from penalties and, in most cases, from interest. Statutory penalties and interest will be waived, except interest on taxes collected and not remitted.

Eligibility

Qualifying for a VDA

A business qualifies if

  • it has any liability for a tax or fee administered by the Comptroller’s office, other than taxes collected under the International Fuel Tax Agreement (IFTA);
  • it has not been previously contacted by the Comptroller, either verbally or in writing, concerning a liability or estimated liability; and
  • it has not received a notification of an audit or examination.

All taxes and fees administered by the Comptroller’s office, other than IFTA, are eligible for a VDA.

The Comptroller’s office will limit its review to reports due four years from the date the business initially contacts us. However, there is no limit on the lookback period for taxes collected and not remitted to the Comptroller’s office.

For questions about the VDA program, call 800-688-6829.

Unclaimed Property

Unclaimed property holders who meet the criteria may enter a VDA with the Comptroller’s office. A company representative or authorized employee can initiate the process, without naming the company if they choose, by contacting the Unclaimed Property Division in writing at:

Texas Comptroller of Public Accounts
Holder Reporting Section
P.O. Box 12247
Austin, Texas 78711

You may also send the request via email to UP.VDA.requests@cpa.texas.gov.

The lookback period for an unclaimed property VDA is 10 years. For questions about unclaimed property VDAs, call 800-321-2274 and choose option 2.

Process

Traditional VDA

A company representative initiates the VDA process by contacting the Business Activity Research Team (BART) in writing. It is not necessary to name the company or client during the initial contact, but there is no harm to the client if it is disclosed at the beginning of the process. The following information is required:

  • Entity type (corporation, partnership, etc.)
  • Brief description of the company’s business and its activities in Texas
  • Date the company began business in its home state and the date it began business activities in Texas
  • The tax type(s) for which a VDA is requested
  • Any taxes the entity is already set up for in Texas, and the taxpayer number
  • A statement indicating that the company has or has not been contacted by the Comptroller about the tax type(s) for which a VDA is requested
  • A statement indicating that the company has or has not collected but not remitted any Texas tax
  • A request for a payment agreement, if desired, and statement that the business anticipates problems regarding full payment of the disclosed taxes
  • An estimate of the amount owed
  • Any additional information in support of the request

Submit the written request by email to VDA@cpa.texas.gov; or mail to:

Texas Comptroller of Public Accounts
Business Activity Research Team
P. O. Box 13003
Austin, Texas 78711-3003

Assuming the initial contact was made without naming the business involved, an examiner with BART will review the submission. Once preliminary approval is obtained, BART will prepare a VDA and send it to the company representative.

Once the signed VDA is returned to us and the taxpayer name has been disclosed, BART will complete the review process and obtain the signature of the Audit Division director.

Identifying the business as part of the initial contact, while purely voluntary, streamlines the process further.

After the VDA is signed by both parties, BART will send the executed VDA with the applicable reporting forms. The tax data and payment of the voluntarily disclosed taxes are due within 60 days, as specified in the agreement.

Fast-Track VDA

To qualify for a Fast-Track VDA, a taxpayer must meet all the current criteria for a VDA and have calculated the tax amount due up front. The VDA cannot include any refund claims (including letters of assignment) and may not ask for a letter ruling from tax policy. The taxpayer must complete a simple spreadsheet for sales and use tax with a breakdown of state and local taxes by report period. For other taxes, the taxpayer should submit returns. If all criteria are met, the Comptroller’s office will proceed with the Fast-Track VDA for unpaid or underpaid tax and will process the reports and payment quickly, without review for additional taxes the business may owe.

To enter into a Fast-Track VDA, a taxpayer must complete the Fast-Track Information on this webpage. The taxpayer must submit the following items:

Submit all information to BART by email at VDA@cpa.texas.gov; or mail to:

Texas Comptroller of Public Accounts
Business Activity Research Team
P. O. Box 13003
Austin, Texas 78711-3003

Once the reports have been processed, the taxpayer will receive the signed agreement and a statement of account.

Limitations

The Comptroller’s office reserves the right to deny the waiver of penalty and/or interest, or to void the agreement entirely, if the business does not adhere to program policies and procedures. Additionally, report periods included in the VDA remain open to future audit, within the statute of limitations. The business must report and pay the tax correctly going forward beginning with the ending date of the agreement.

The Comptroller may change VDA policies and procedures at any time.

Multistate Businesses

Multistate businesses who wish to approach several states simultaneously may choose to use the services of the National Nexus Program of the Multistate Tax Commission even if the business has unreported or underpaid taxes in multiple states.

96-576
(08/2020)