Voluntary disclosure offers businesses that have failed to comply with Texas tax obligations a chance to come forward, limit their liability, and start fresh. For companies that have nexus they didn’t know about or obligations they’ve neglected, the voluntary disclosure program can save significant money compared to waiting for the Comptroller to find you.
Limited lookback periods are the primary benefit. Instead of owing tax for all periods you should have been filing, voluntary disclosure typically limits the lookback to four years. If you’ve had nexus for ten years but never filed, eliminating six years of liability represents substantial savings.
Penalty waiver accompanies voluntary disclosure in most cases. The Comptroller waives penalties for taxpayers who come forward voluntarily before being contacted about an audit or assessment. You’ll still owe the tax and interest, but eliminating penalties can reduce your total liability by 20% or more.
Anonymity during initial negotiations protects you from triggering an audit. Voluntary disclosure agreements are typically negotiated through a representative without initially identifying the taxpayer. If negotiations fail or the terms are unacceptable, you can walk away without having alerted the Comptroller to your existence.
Managed compliance going forward is built into the process. As part of voluntary disclosure, you’ll register for the appropriate permits and establish systems to comply with ongoing obligations. This prevents future problems and puts you on solid footing.
Certainty replaces uncertainty. Living with unfiled returns and unknown exposure creates ongoing stress. Voluntary disclosure resolves the uncertainty, quantifies your liability, and puts the problem behind you.
Voluntary disclosure isn’t available to everyone. If the Comptroller has already contacted you about an audit or assessment, or if you’ve been filing incorrect returns rather than no returns at all, different rules apply. The program is designed for taxpayers who come forward before being caught.
Timing matters. The benefits of voluntary disclosure disappear once the Comptroller initiates contact. If you suspect you have unfiled Texas tax obligations, acting sooner preserves your options.
To learn whether voluntary disclosure makes sense for your situation, schedule a free consultation with our team.
