If you`re a business owner in the state of Washington, you may have heard of a voluntary disclosure agreement (VDA) program. The purpose of this program is to allow businesses to correct their tax reporting errors voluntarily and avoid penalties, interest, and other consequences that could result from a failure to report.

A voluntary disclosure agreement is a binding agreement between a business and the state`s Department of Revenue. Essentially, it`s a way for businesses to come clean about any tax reporting errors they may have made without fear of being penalized for their mistake. The program is designed to encourage businesses to come forward and report any errors before they are discovered by the state`s tax authorities.

Washington`s voluntary disclosure program is available to businesses that have never filed a tax return or have underreported their taxes. Businesses that have been contacted by the Department of Revenue or are currently being audited are not eligible for the VDA program.

To participate in the VDA program, businesses must submit a written request for a voluntary disclosure agreement to the Department of Revenue. This request should include the type of tax involved, the tax periods in question, and an estimate of the amount of tax due.

The Department of Revenue will review the request and may ask for additional information before deciding whether to grant a voluntary disclosure agreement. If the request is approved, the business will be required to pay all the taxes owed, plus interest, and may be subject to a penalty of up to 25% of the tax owed.

However, businesses that successfully complete a voluntary disclosure agreement are not subject to further audit or penalty for the tax periods covered by the agreement. This means that businesses can rest assured that they won`t face any additional consequences for their past mistakes.

In conclusion, if you`re a business owner in Washington and are aware of any tax reporting errors, it may be in your best interest to consider participating in the state`s voluntary disclosure program. By doing so, you can avoid costly penalties and other consequences associated with tax errors and rest easy knowing that your business is in compliance with state tax laws.