Voluntary Disclosure Agreements FAQs

Your Voluntary Disclosure Agreements (VDA)  questions, answered.


Frequently Asked Questions for
Voluntary Disclosure Agreements (VDA)

What is a VDA?

VDA stands for a Voluntary Disclosure Agreement. It is an agreement with a tax authority allowing you to voluntarily disclose unreported tax liabilities and settle them on mutually agreed terms, with reduced look-back period, abated penalties and lower (or waived) interest.

Who can benefit from a VDA?
Businesses or individuals with unreported income, overstated deductions, or other tax errors they want to rectify proactively.
What are the benefits of a VDA?

Reduced look-back period, abated penalties, reduced interest, and peace of mind by resolving past tax issues.

Am I eligible for a VDA?

Eligibility varies by state and tax authority. You’re not eligible if you’re already under audit or investigation.

What information do I need to provide for a VDA?

Details of the unreported income, tax period involved, and any mitigating factors.

What are the typical terms of a VDA?

Payment of back taxes, abated penalties, and potentially waived interest.

When does the VDA take effect?

Once both parties agree and sign the agreement.

What happens after I enter the VDA? 

You’ll need to comply with the agreed-upon payment schedule and cooperate with the tax authority throughout the process.

Can I withdraw from a VDA?

Yes, but only before it’s finalized. If you withdraw before signing, the tax authority is required to expunge your records. However, once you sign the agreement it’s binding.

Is a VDA confidential?

Confidentiality varies by jurisdiction, but details about the specific taxpayer and their VDA may be shared within the tax authority.

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