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Navigating State Voluntary Disclosure Programs: Multistate and Single State Programs to Resolve Unseen Liabilities

Minimizing or Avoiding Penalties and Interest, Identifying Nexus Problems, and Quantifying Unseen Liabilities

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Tuesday, May 24, 2016

Recorded event now available

This course will provide tax advisers with a detailed and practical guide to navigating the multistate voluntary disclosure programs (VDPs) for noncompliant taxpayers with potential but unassessed state tax liabilities through a central point of contact. The panel will also discuss the nuances of individual states’ VDPs and outline strategies for determining whether and when to utilize a VDP to achieve favorable tax results, with a practical focus on what a company needs to do to come into full tax compliance while avoiding criminal exposure, and minimizing taxes as well as penalties and interest.

Description

Most states have VDPs that allow taxpayers to resolve tax bills accrued during a defined look-back period. In addition, almost three-quarters of U.S. states, plus the District of Columbia, participate in a multistate VDP to assist taxpayers by providing an integrated, uniform procedure for settling unpaid back taxes. Utilizing VDPs can be a key strategy in resolving tax liabilities in a way that avoids penalties and interest on unpaid taxes, while quantifying unreported tax liabilities.

A significant advantage to VDPs is the opportunity most programs present for companies to address issues of expanded nexus. As states continue to look for mechanisms to tax economic activity that does not include physical presence within their jurisdictions, nexus expansion takes on a larger role in states’ taxing regimes. Taxpayers often find themselves with unanticipated tax liabilities, and VDPs can serve as a way to identify these liabilities while protecting the taxpayer from open disclosure.

Detailed and complex rules govern participation in VDPs, and tax advisers must be aware of their role and duties in utilizing a VDP.

Listen as our experienced panel provides a comprehensive guide to the benefits, risks and processes of VDPs, both at the multistate and individual state level.

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Outline

  1. “Creeping nexus” and reserves for uncertain tax positions as triggers
  2. What is the voluntary disclosure program
  3. Taxpayer goals and strategies in VDPs
  4. Mechanics of multistate VDPs
  5. Mechanics of individual state VDPs
  6. Voluntary disclosure agreements

Benefits

The panel will review these and other important issues:

  • When should a taxpayer elect to apply for VDP participation
  • Nexus issues that can arise from a VDP participation, and how can taxpayers avoid risk of additional tax from expanded nexus
  • Means to achieve penalty abatement both inside and outside of VDP
  • How multistate VDPs work in comparison, and conjunction, with individual states’ VDPs?
  • Illustration using Massachusetts and surrounding states’ VDPs

Faculty

Robinson, Morris N.
Morris N. Robinson, Esq., CPA, LL.M.
Managing Director
M. Robinson & Co.

Mr. Robinson is an experienced tax lawyer and CPA with over 30 years of tax-law experience. Mr. Robinson and his team...  |  Read More

Michael L. Colavito, Jr., JD
Michael L. Colavito, Jr., JD
Senior Manager, Tax Services Group
Aronson

Mr. Colavito counsels clients on a broad range of state and local tax issues. His expertise extends to many areas of...  |  Read More

Sanford I. Millar
Sanford I. Millar
MillarLaw

Mr. Millar focuse his practice on tax law. He represents clients in diverse businesses in domestic and complex...  |  Read More