- Three-year or six-year limited look-back periods where appropriate
- No referral for criminal prosecution
- No imposition of penalties
If the taxpayer’s application is accepted, the taxpayer must pay the tax and interest due for the agreed periods. Taxpayers who can’t pay in full at the time of acceptance may qualify for an Installment Payment Agreement to pay over time, with interest continuing to accrue. The taxpayer also agrees to remain in compliance with tax laws in the future.
Voluntary disclosure can be especially useful for taxpayers who have not filed NYS tax returns in many years, and would like to become compliant. Examples include:
– A taxpayer lives outside of New York and timely files her Federal returns. She does not realize that her investments have included New York source income and she also should have been filing New York State non-resident income tax returns. With voluntary disclosure, she may be able to file returns for a limited look-back period, pay tax and interest, and avoid penalties.
– For many years, due to overwhelming family and personal problems, a taxpayer has not been able to focus on preparing and filing his income tax returns. Now he is ready to get that part of his life in order. He may be able to avoid penalties and limit his exposure through the voluntary disclosure program.
– A New York business has been collecting sales tax and not remitting the tax to the State. Under voluntary disclosure, the business may be eligible for a six-year limited look-back period, no penalties, and no referral for criminal prosecution for the conduct disclosed in the application.
The NYS program may be available for taxpayers participating in the IRS Offshore Voluntary Disclosure Program (OVDP), regarding foreign bank accounts. For these taxpayers, the State’s look-back period will be for the same number of years as required by the IRS.
Taxpayers who might benefit from voluntary disclosure should come forward sooner rather than later. If the State is already investigating the situation, or if an audit has started, the taxpayer is no longer eligible.
Submitted by Tenenbaum Law on