Voluntary Disclosure Program
The Department encourages businesses and individuals that are not in compliance with Indiana tax laws to voluntarily come forward to request participation in our voluntary disclosure agreement (VDA) program. The full disclosure program is generally made available only to those taxpayers who do not have brick-and-mortar nexus with Indiana, such as an Indiana office, warehouse, plant or residence. Those taxpayers that do not appear to qualify due to a physical presence within Indiana should still submit their VDA requests for consideration; the Department will offer an alternative proposal to meet their situations.
If you want to know more about the voluntary disclosure program, you can contact the VDA office anonymously. The Department will not, in any way, seek to identify you. To remain anonymous when making the formal application, you can work with a third-party representative, such as a tax preparer, an accountant or an attorney.
- The request must be in writing via U.S. mail, fax or email.
- The representative submitting the request must provide their name, mailing address, phone number and email address.
- Indicate the type(s) tax for which you seek a VDA (eg., corporate income, S corporation, partnership, LLC , SMLLC, individual income, sales/use, nonresident shareholder/partner withholding, etc.).
- If requesting an income tax VDA, indicate your fiscal year end and type return filed for federal purposes.
- Provide a general description of your Indiana business activity that creates nexus. Include responses to the following:
- Do you own or lease real or tangible personal property in Indiana?
- Do you have employees or independent sales representatives soliciting sales in Indiana?
- Do you have Indiana inventories?
- Do you engage third parties to install, service or repair property sold to Indiana customers? If so, describe the type of services performed.
- Provide an estimate of the amount of tax liability that is due for the required look-back period to be reported. If no tax is due, you must disclose this in your request.
- Look-back periods: Income tax look-back years are the three most current annual returns for which the original filing due date has already expired at the time your VDA request is transmitted to the VDA office. For trust taxes, such as sales/use and withholding, look-back periods include the three calendar years beginning on January 1 each year and will also include the monthly periods through the current year in order to bring your account as current as possible. This will always be a minimum of 36 months plus the current year period. A longer look-back period is required if taxes were collected/withheld and not remitted that will cause the look-back period to include all periods where tax was collected/withheld and not remitted.
- Include a statement of whether you have collected or withheld taxes that you have not remitted.
- Include a statement that you have not been contacted by the Indiana Department of Revenue regarding the specific tax type for which you seek a VDA.
- Include a statement that you have not previously filed tax returns in Indiana through a related entity or under a different corporate name for the tax type for which you are requesting the VDA.
- Submit the above information, and any other information you deem relevant, to the VDA Office via U.S. mail, fax or email. Transmittal information is included at the bottom of this webpage. Requests via U.S. mail or e-mail are preferred.
The Department will keep the agreement confidential and will not disclose any terms or conditions of the agreement to any tax authorities of any other state or governmental authority or to any person except as provided by exchange of information agreements.
You will be disqualified and the agreement rendered null and void if any of the following are discovered:
- Previous contact of any kind by the Department related to the specific tax type of the VDA request.
- Misrepresentation or omission of material facts set forth in the VDA request.
- Failure of the taxpayer to comply with and follow the terms of the VDA.
In exchange for the taxpayer coming forth voluntarily, the Department will agree to:
- Waive all penalties applicable to taxes and returns filed for the required look-back periods reported;
- Waive the filing requirements for periods prior to the look-back period; and
- Waive audits prior to the look-back period, unless it is determined that the taxpayer is subject to disqualification as noted above.
The basic terms and conditions of the voluntary disclosure program call for:
- Income: A full three-year look-back period for income tax for years already past the original filing due date. Return due dates are the 15th day of the fourth month after the end of the reporting period. Returns, not work papers, must be filed. Net operating losses or any other losses incurred prior to the look-back period may not be carried forward into the look-back returns.
- Sales and Use/Withholding: A full three-year look-back beginning with January 1 each year, plus your most current monthly period to bring your account as current as possible. If a taxpayer has collected and not remitted Indiana sales/use tax or withholding taxes, or any other tax termed to be a “trust” tax collected, the look-back period will be extended to include all periods that Indiana taxes were collected and not previously remitted.
- Schedules: These may be submitted in Excel, Word or another acceptable format and will substitute for Indiana sales/use tax or withholding tax look-back period reporting for VDA purposes only. The schedules must be broken down by calendar year periods plus as many months of the current year period to bring accounts current at the time reports are filed to the VDA office. This will always be 36 months plus current year monthly periods.
- Payments: Per Indiana statute, all payments are applied to interest, and then tax, beginning with the oldest periods going forward.
- Interest: Indiana statute does not provide for a waiver of interest due.
- Communications: All returns, registrations, work papers, spreadsheets and so on required per terms of the written VDA Agreement must be sent directly to the VDA office. Do not mail to mailing addresses shown on printed returns or registration forms. The VDA office must receive your returns and all other documents in order to validate the completion of the terms of the written VDA agreement, as well as to be able to waive the penalties that would be otherwise applicable. The mailing address is shown below.
- Day 1 – Taxpayer representative submits request for VDA.
- 10 days after receipt of VDA request – The VDA office sends a proposed voluntary disclosure agreement to the taxpayer representative.
- 30 days – Taxpayer or POA must sign and return VDA agreement only.
- 90 days – Taxpayer has 90 additional days from the date of signing the agreement to prepare and submit returns, work papers and registration forms.
- 10 days – The VDA office processes returns and all other required documents and emails the taxpayer or POA concerning tax and interest due.
- 10 days – Taxpayer has 10 days to submit payment for the tax and/or interest due to the VDA office.
For more information about the volunteer disclosure agreement program, contact Eric Troop, Monday through Friday, 8 a.m. to 4:30 p.m. (Eastern Time Zone).
Eric Troop – DOR Mail Stop #104
VDA Office/Indiana Department of Revenue
100 N. Senate Ave., Rm. IGCN241
Indianapolis, IN 46204
Phone: (317) 233-6036
Fax: (317) 234-5531