Arizona Voluntary Disclosure Agreement: What You Need to Know

If you`re a business owner or taxpayer who has not yet paid their Arizona taxes, you may be interested in the Arizona Voluntary Disclosure Agreement (VDA). This program allows taxpayers to come forward and report their liabilities in exchange for a reduced penalty and interest rate.

The VDA is a great option for taxpayers who are behind on their taxes and want to avoid costly penalties and interest rates. If you`re considering making a voluntary disclosure, here`s what you need to know:

Who is eligible?

The VDA program is available to both business and individual taxpayers who have not yet filed their Arizona tax returns or have underreported their tax liabilities. However, you must not have been previously contacted by the Arizona Department of Revenue about your tax liabilities.

What are the benefits?

The VDA program offers several benefits to taxpayers who come forward voluntarily:

1. Reduced penalty: Normally, non-compliant taxpayers are subject to a penalty of 25% of the unpaid tax liability. However, under the VDA program, the penalty is reduced to just 10% of the unpaid tax liability.

2. Reduced interest rate: Taxpayers who come forward voluntarily also qualify for a reduced interest rate. Under the VDA program, the interest rate is reduced to 3% per year.

3. Waiver of criminal prosecution: If you`re worried about facing criminal charges for not paying your taxes, the VDA program can give you peace of mind. As long as you meet the program requirements and fully disclose your liabilities, you will not be subject to criminal prosecution.

How does it work?

To participate in the VDA program, you must submit a Voluntary Disclosure Agreement form to the Arizona Department of Revenue. The form requires you to provide detailed information about your tax liabilities, including the type of tax owed, the years in question, and the amount owed.

Once you submit the form and pay the agreed-upon amount, you will be considered compliant and will not be subject to further penalty or interest. However, you will still be required to file any outstanding tax returns and pay any taxes owed.

Conclusion

If you`re a taxpayer who has not yet paid their Arizona taxes, the Voluntary Disclosure Agreement program may be a good option for you. By participating in the program, you can avoid costly penalties and interest rates and protect yourself from criminal prosecution.

To learn more about the program and determine if you`re eligible, contact a tax professional or the Arizona Department of Revenue.