September 13, 2016

Georgia Voluntary Disclosure Program

Georgia Voluntary Disclosure Program

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Companies with operations, representatives or independent contractors in multiple states are often unaware of tax and payment obligations which may exist. Not being informed can lead to delinquent filings and payment of taxes owed (corporate income, sales, use and other taxes) to the state. Depending on the type of tax owed, management may not be aware of the obligation or the severity of the situation until they receive a letter from the State Department of Revenue. At this point, it’s too late to to address and resolve the situation. The good news is that Georgia offers a voluntary disclosure program (VDP) designed to help those with tax issues come into compliance with state regulation. Companies that owe sales, corporate income, payroll, and use tax can participate in this program to conform. To help clients, prospects and others understand this program and its benefits, Wilson Lewis has provided a brief summary below.

Qualification

It’s important to be aware that in order to qualify for the VDP certain criteria must be met including;

• The completion of a Voluntary Disclosure Application
• Companies applying must not have not been contacted by the Department of Revenue for enforcement purposes about an outstanding tax obligation (audit contact on an open tax obligation)
• Companies must be in compliance with all other state tax filing and payment obligations

Anonymous applications are accepted by the Department of Revenue so long as the designate is identified in the application.

Benefits

For qualifying taxpayers, there are several benefits to participating in the program. In most cases, qualified participants will receive a waiver of all penalties, however it’s important to note that although penalties are waived, interest for the penalties waived must still be paid for  years under examination.

Beyond this, the number of years (look back period) a tax payer must disclose and pay previous liabilities under the program is also limited. Generally, the VDA allows for a three year look back period but this can be reduced or extended depending on a number of variables. Below is a brief explanation of the standard look back periods for qualifying taxpayers:

• Sales, Use & Withholding Tax – The look-back period for this tax type is generally 36 months but can extend back as far as necessary to recover taxes that were collected but not remitted.
• Corporate Income Tax – The look-back period depends on the amount of tax due and whether there was a net operating loss during the periods in questions.

Please note that if a small amount of tax is due from prior periods, it’s unlikely there will be a waiver of liability as part of the VDA.

Contact Us

The VDA is a useful tool in attaining compliance with the Department of Revenue without paying high penalties and interest. However, before applying for the program it’s essential to consult with a qualified professional to assess your situation. If you would like to learn more about VDA or have questions about tax planning and compliance, Wilson Lewis can help. For additional information, call 770-476-1004, or click here to contact us. We look forward to speaking with you soon.