The Texas Comptroller’s voluntary disclosure program provides a formal process for businesses to resolve past non-compliance with Texas tax obligations. Understanding how the program works helps you decide whether it’s right for your situation.
The program applies to businesses that have Texas nexus and tax obligations but haven’t been filing required returns. This includes out-of-state businesses that crossed economic nexus thresholds without registering, companies with physical presence they didn’t realize created nexus, and businesses that simply failed to file returns they knew were required.
Applications are submitted through the Comptroller’s office or through a representative on behalf of an anonymous client. The anonymous approach protects you during negotiations; if terms can’t be reached, you haven’t exposed yourself to audit.
The standard lookback period is four years. Rather than owing tax for all periods you should have been filing, voluntary disclosure limits your liability to the four most recent years. For businesses with longer periods of non-compliance, this limitation represents significant savings.
Penalties are waived for voluntary disclosure participants who meet program requirements. You’ll still owe the underlying tax and interest, but penalty waiver alone can reduce your total liability substantially. Interest cannot be waived under Texas law.
You must agree to future compliance as part of the program. This means registering for appropriate permits, filing all required returns going forward, and maintaining accurate records. The Comptroller monitors voluntary disclosure participants to ensure continued compliance.
Payment arrangements may be available for the liability determined through voluntary disclosure. If you can’t pay the full amount immediately, you can negotiate payment terms as part of the overall resolution.
Not all situations qualify for voluntary disclosure. If you’ve been filing returns but underreporting tax, voluntary disclosure doesn’t apply. If the Comptroller has already contacted you about an audit, you’re typically disqualified. The program is designed for taxpayers who come forward proactively.
To determine whether Texas voluntary disclosure is right for your business, schedule a consultation with our team.
