Colorado Voluntary Disclosure Agreements
Published: April 28th, 2018
What if you didn’t handle sales tax properly?
- Proper sales tax not collected
- Consumer Use Tax not remitted (Use Tax impacts nearly all businesses!)
- Not licensed everywhere required
- Not filing all required tax types
- Collecting but not remitting tax – very serious!
Act quickly before the State or local home-rule cities contact you and your options become limited. Doing business in Colorado carries substantial risk due to multiple jurisdictions (State, Denver, Aurora, Boulder, Colorado Springs, etc.) requiring separate registration, collection, and filing.
Your Options:
- Do nothing and hope not to be caught—but liabilities continue to build and can go back to day one of business.
- Register and begin filing returns—statute of limitations may not protect prior periods, and some cities audit back to inception.
- Engage a third party for an anonymous Voluntary Disclosure Agreement (VDA):
- Waived penalties and a typical three-year look-back period
- Negotiated payment terms
- Fresh start by registering and filing past periods only as agreed
CAUTION:
If you’ve collected but not remitted tax, all tax plus interest and possibly fraud penalties may be due. Prompt voluntary resolution before discovery is crucial.
Remedies are often available when obligations are identified proactively—even if you’re already under audit. See our Audit Case Studies for more details.