Georgia Voluntary Disclosure Program

SEE ALSO >>> Tax Planning

Managing a business can be a difficult task. There are several operational issues to address, including employee training and management, new product or service development, quality assurance and new customer acquisition. Buried beneath all of these responsibilities is financial reporting and tax management. Depending on the company, there may be several tax liabilities to consider and plan for including: Georgia state income tax, sales and use tax, franchise tax and other specialty taxes. It sometimes happens that despite good intentions a company may overlook taxes that are due or are simply unaware it applies to them. For example, because sales and use tax laws vary by state, it’s not uncommon for a company to overlook them, even if they conduct business in multiple locations. This can often result in an expected surprise when a letter arrives from the Georgia Department of Revenue. The good news is that there is a Voluntary Disclosure Program designed to help companies (and even individual taxpayers) become compliant. To help clients, prospects and others, Wilson Lewis has provided a summary of key program details below.

Program Overview

The Voluntary Disclosure Program was implemented to provide a means for taxpayers with unreported or underreported tax liabilities to gain compliance. The unique aspect of this program is that it does not apply to only one type of tax, which is common in programs managed by other states. Rather, it applies to all Georgia tax levied on a business’s economic activity or even individual state income, estate and other taxes.

Program Qualification

There are three requirements for a taxpayer to be eligible to participate, including:

• Complete and submit the application form.
• Have not been contacted by the Georgia Department of Revenue for enforcement purposes about an outstanding tax obligation. This includes contact about an audit, registration or tax reporting requirement.
• Maintain compliance with all other state tax obligations.

Program Benefits

There are several benefits to participating in the program if the taxpayer qualifies, including:

• Penalty Waiver – Most taxpayers will have their penalties waived for the period agreed upon in the disclosure agreement. Unfortunately, interest is not waived and will be imposed on all outstanding taxes due to the state. The waiver of penalties can represent a significant savings depending on the type and amount of tax due.
• Limited Look-back Period – The look-back period is generally limited to three years for all tax types, but there are certain exceptions that can be made to extend the period. The Department of Revenue has stated that for sales and use or withholding tax issues, the look-back period is generally three years, but it can be extended. The standard look-back period for corporate income tax depends on the tax amount due and whether there is a net operating loss during that period.

Contact Us

Maintaining compliance with the state Department of Revenue is essential for business and individual taxpayers. If your company has open tax issues with the state or if you suspect a liability may exist, then this program may help you. It’s important to speak with a qualified tax professional before making any disclosures to the state. For additional information on the Voluntary Disclosure Program or for assistance with tax planning issues, Wilson Lewis can help. For additional information, please contact us at 770-476-1004, or click here to contact us.