Maryland Voluntary Disclosure Agreement: Everything You Need to Know
Maryland is one of the states in the US that implements sales and use tax laws. If you`re a business owner in Maryland, you are required to pay sales tax on all taxable goods and services. However, what if you missed a few tax payments or didn`t register for sales tax at all? That`s where the Maryland Voluntary Disclosure Agreement (VDA) comes in.
A VDA is a program that allows taxpayers to come forward and voluntarily disclose any unpaid taxes, without fear of penalties or interest. In Maryland, the VDA program is administered by the Comptroller`s Office and covers various taxes, including sales and use tax, withholding tax, and various business taxes.
Who is eligible for the Maryland VDA program?
The VDA program is open to any taxpayer who has not filed returns, underreported taxes owed, or not registered for tax purposes in Maryland. However, the program is not available to taxpayers who are already under audit.
Why should you consider the VDA program?
There are several benefits of participating in the VDA program, including:
1. Avoiding penalties and interest: If you come forward voluntarily and make a good faith effort to resolve any tax issues, you can avoid penalties and interest on unpaid taxes.
2. No statute of limitations: The VDA program has no statute of limitations, meaning you can voluntarily disclose any unpaid taxes from any period, without fear of being audited.
3. Confidentiality: The information you provide as part of the VDA program is confidential and cannot be used against you in any future audit.
How does the Maryland VDA program work?
The process for participating in the VDA program is relatively straightforward. Here are the basic steps:
1. Submit a request: Contact the Comptroller`s Office and submit a request to participate in the VDA program. You will need to provide information about your business, including your name, address, and federal identification number.
2. Review and approval: The Comptroller`s Office will review your request and determine if you are eligible for the VDA program. If you are approved, you will be provided with a disclosure agreement.
3. Disclosure agreement: The disclosure agreement outlines the terms of the VDA program, including the taxes you are disclosing, the period covered, and the terms of payment.
4. Payment: Once you have signed the disclosure agreement, you must pay all taxes owed, including interest, within 45 days.
5. Compliance: To remain in compliance with the VDA program, you must file all required tax returns and pay all future taxes on time.
In conclusion, the Maryland Voluntary Disclosure Agreement program can provide significant benefits to taxpayers who have missed tax payments or not registered for tax purposes in Maryland. If you`re eligible for the program, it can help you avoid penalties and interest on unpaid taxes, and provide a fresh start for your business. If you have any questions about the program, we recommend contacting the Comptroller`s Office for more information.