Sales tax voluntary disclosure Illinois Department of Revenue
With rules surrounding the sales tax voluntary disclosure program, our firm sent an email to the IDOR to get clarity on the requirements as seen below. The golden rule is that the agency did not contact the taxpayer or their business for the audit. Again, the main goal with any voluntary disclosure is to side-step the penalties and their associated interest that could be easily worth 50% of the tax liability.
Here is a very specific question that most of our clients ask, that we emailed to the IDOR:
Dear IDOR,
I have a client that would like to file for a voluntary disclosure (sales tax). My question to you is whether the company can file a VD if they have engaged in any of the acts below:
1. Filed sales tax returns in the past under the business that wishes to file a VD.
2. Have a sales tax exemption certificate for their business.
3. Registered their business in the state of IL.
Please let me know if any of the factors above would disqualify the business from a VD.
Please note: They have not been contacted by the IDOR.
Answer from the Illinois Department of Revenue:
That is correct. If they did file then they would not qualify because they would need to file amended returns for those periods. Registration and having a sales tax certificate do not automatically disqualify them for the VDA.
Note: This is a very different procedure than what was the case many years ago. Prior to the broadening of the program requirements, if a taxpayer did as much as create a legal entity in the State, then, that would negate them from entering the program.
Sales tax voluntary disclosure Illinois Department of Revenue
