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Voluntary Disclosure Program

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Business attorney Oleg Otten in Miami, Florida, will help you with Voluntary Disclosure Program

Voluntary Disclosure of Tax Information

Running a business is tough. And the IRS demands its part. But being busy building their American Dream, many entrepreneurs forget about the state tax issues. Then, one day, when it’s the least convenient, you receive a notice of assessment, a letter of inquiry, or an audit notice. At this point, your business is at risk of heavy penalties, which threaten to end your American Dream.

As you probably know, Florida does not have individual income tax. But the state must collect revenues somehow. Therefore, Florida collects two major taxes: sales tax and corporate income tax, as well as several minor taxes: intangible tax, communication services tax, documentary stamp tax, fuel tax, gross receipts tax on utility services, estate tax, severance tax, insurance premium tax and fees, and reemployment tax.

Consequences of Tax Non-payment or Underpayment

In recent years, both federal and state governments are stepping up enforcement of the tax collection. State and local auditors are significantly more active and aggressive now than a decade ago. The enforcement agents are unforgiving when they catch a business owner who forgot (or didn’t know) about his or her state tax obligations. Moreover, if you charged and collected sales tax from your customers but didn’t remit it to the state, the Florida Department of Revenue may allege that you committed theft of state funds. In that case, the state can charge you with a felony. See Florida Statutes Sec. 212.15(2).

The good news is that you can avoid these serious consequences through voluntary disclosure – a process that gives noncompliant taxpayers the opportunity to report previously unpaid or under-reported state tax liabilities. The Voluntary Disclosure Program covers any state tax administered by the Florida Department of Revenue, such as:

  • Sales and use tax (including discretionary sales surtaxes)
  • Corporate income tax
  • Insurance premium taxes, surcharges, and fees
  • Reemployment assistance (formerly Unemployment Compensation)
  • Gross receipts tax

Voluntary Disclosure Program is available to any taxpayer with a state tax liability, unless the Florida Department of Revenue already contacted you regarding the debt. If you owe taxes in Florida, contact Otten Law Firm at info@ottenlawfirm.com or (305) 771-0181 to discuss your options with the attorney.

Program Benefits

Voluntary Disclosure Program is beneficial to any business person and individual taxpayer who wishes to avoid the penalties and criminal charges based on tax evasion. The Florida Department of Revenue can look for tax discrepancies in tax returns for three years before the date of the voluntary request. After you pay your tax debt with interest, the Florida Department of Revenue will likely waive all penalties, except when you collected but not remitted a tax.

Voluntary Disclosure Program is the taxpayer’s opportunity to voluntarily pay taxes without a penalty. You must submit application for the Voluntary Disclosure Program by written request. To avoid errors, you should have an experienced Florida attorney communicate with the Florida Department of Revenue on your behalf and to review the information requested by the Florida Department of Revenue. Settlement negations with the Florida Department of Revenue are not intuitive, and strategies you think could be advantageous to a settlement may actually hurt your position. Do not try to negotiate with the state without an experienced Florida attorney on your side.

How Business Lawyer can Help

At Otten Law Firm, we negotiate with the Florida Department of Revenue to reduce client’s assessed tax liability or find a solution allowing the taxpayer to pay the debt over time. Also, we negotiate for our clients to reduce or eliminate penalties. If you are facing a liability that you believe you owe but cannot pay, call or email Otten Law Firm at info@ottenlawfirm.com or (305) 771-0181 today!

What should you do if you think you owe back taxes?

Consider participating in the Voluntary Disclosure Program.

What is Voluntary Disclosure?

Voluntary disclosure is the process of reporting unpaid or underpaid taxes administered by the Florida Department of Revenue. It’s the taxpayer’s opportunity to voluntarily pay these taxes without a penalty. In most cases, the issue is resolved within several weeks of receiving the necessary information.

The Florida Department of Revenue has a voluntary disclosure program for all the taxes that the agency administers, including:

  • Sales and use tax
  • Discretionary sales surtax (county tax)
  • Corporate income tax
  • Documentary stamp tax
  • Communications services tax
  • Insurance premium tax
  • Gross receipts tax
  • Motor and other fuel taxes
  • Reemployment compensation tax
  • Solid waste and surcharge
  • Tax on gross receipts of dry-cleaning facilities

Who is eligible?

Anyone who has any tax liability for a tax administered by the Florida Department of Revenue and who has not yet been contacted by the Department concerning the liability is eligible. But disclosures relating to delinquencies or deficiencies that are obvious and would routinely generate a billing even if not self-disclosed are not eligible for the program.

What are the benefits to the taxpayer?

When you pay the your tax debt and interest, all penalties will be waived, unless you collected and not remitted the tax. In those instances, you will most likely have to pay a five percent penalty per Rule 12-13.0075(8), Florida Administrative Code (F.A.C.), unless you present a reasonable cause.

How far back will the Department look?

The Florida Department of Revenue will look back three years immediately preceding the postmark date of the voluntary disclosure request. See section 213.21(7), Florida Statutes (F.S.). If you do not take advantage of this program, the Department may hold you liable for a longer limitation period of the relevant taxes.

How Do I Apply?

You must apply by written request.

Email Florida Business Attorney directly: info@ottenlawfirm.com

To schedule a consultation, please visit Legal Consultation page

Florida Business Attorney Oleg Otten