Kansas Voluntary Disclosure Agreement: What You Need to Know
If you are a business owner who has been operating in Kansas without proper tax registration, the Kansas Department of Revenue (KDOR) provides an opportunity to come clean and avoid the threat of audits and penalties through the Kansas Voluntary Disclosure Agreement (VDA).
What is the Kansas Voluntary Disclosure Agreement?
The Kansas VDA is a program that allows businesses to voluntarily disclose and pay taxes they owe to the state of Kansas without fear of audit and penalty. This program is designed for businesses that have not registered for tax purposes or have underreported taxes in Kansas.
The program encourages businesses to come forward and pay any taxes due, which helps the KDOR increase revenue while preventing the need for audits and enforcement actions.
What are the Benefits of the Kansas Voluntary Disclosure Agreement?
If you participate in the Kansas VDA, you can avoid tax audits and penalties that arise due to non-compliance and underreporting of taxes. Additionally, businesses that voluntarily disclose their unreported taxes can negotiate payment terms and avoid paying onerous penalties.
Other benefits of the program include limited audit exposure beyond the disclosure period, a waived penalty of up to 25%, and no interest charges on the unpaid tax liability.
Requirements for Participation in the Kansas VDA Program
To be eligible for the Kansas VDA program, businesses must meet the following criteria:
– Have not previously registered with the KDOR or reported or paid taxes owed to the state voluntarily.
– Have not been contacted in any way by the KDOR regarding the taxes owed.
– Be currently operating in Kansas or have recently ceased operations.
How to Apply for the Kansas Voluntary Disclosure Agreement
To apply for the Kansas VDA program, businesses must submit a written request to the KDOR. The request should include:
– Name and taxpayer identification number of the business.
– A description of the business activities conducted in Kansas.
– The type of tax owed and the period for which taxes should be paid.
– A statement affirming that the business has not been contacted by the KDOR regarding the taxes owed.
The Kansas VDA program provides an excellent opportunity for businesses to correct their tax liabilities and avoid potential audit and penalty costs. If you are a business owner who has not yet registered for tax purposes in Kansas, consider participating in the program to avoid any legal issues.
In conclusion, do not let the fear of audits and penalties deter you from coming forward and disclosing any unreported taxes. The Kansas VDA program is an excellent opportunity to correct your tax obligations, increase revenue for the state of Kansas, and avoid any potential legal issues.