Overview

 

The Department’s Voluntary Disclosure Agreement (“VDA”) program for nonfilling taxpayers can help you or your business comply with Montana’s tax laws and resolve your tax liabilities for each tax the Department administers.

 

If you qualify for the program:

 

• You disclose your Montana tax liability, file returns for the last five taxable years, and pay the statutory interest.
• The Department waives the penalties for all periods covered by the VDA.

 

Apply for the VDA program by contacting us directly, or through the services of the Multistate Tax Commission's Multistate Voluntary Disclosure Program if you owe taxes in other states.

 

  

Qualifying for Voluntary Disclosure

 

The Department reviews each request based on its own merits and will only consider a request if you:

 

• Have not filed a return for the tax type covered by the VDA within the last five years.
• Have not had previous contact with the Department of Revenue or its agencies, including the Multistate Tax Commission, regarding a tax covered by the VDA. This includes:
  
  
  • Audit, review, or assessment notices;
  • Information requests; and,
  • Registration letters.

 

• Have come forward on your own and submitted a voluntary disclosure application,
• Agree to file all returns and pay all taxes and statutory interest in the timeframe, also referred to as the "lookback” period, agreed upon and specified in the VDA,
• Agree to register with the Montana Secretary of State (if a business entity), file returns, pay all taxes going forward, and,
• Have not been part of any criminal investigation or pending litigation for nonpayment, delinquency, or fraud related to any tax due.

 

 

Applying for Voluntary Disclosure

 

You must submit a written request to the Department. Once the Department receives your request, it will accept, reject, or offer a counterproposal based on your submitted information.

 

If accepted, we will prepare a draft VDA for review and approval by you or your representative.

 

If you are working with a representative, you remain anonymous until the signed VDA is returned to the Department.

 

Please send your request to:

 

Montana Department of Revenue
Voluntary Disclosure Program
PO Box 5805
Helena, MT 59604-5805

 

 

What To Include With Your Request

 

Businesses

 

If you are a business entity requesting a VDA, you must include:

 

• The business entity type, i.e., C corporation, S Corporation, Partnership, etc.
• A full and accurate statement of the entity’s activities for the five filing periods before the VDA date.
• A full and accurate statement of the entity’s activities in Montana for the five filing periods before the VDA date.
• A statement of how long the entity has been doing business in Montana.
• An explanation of why the entity did not register with the Montana Secretary of State.
• An explanation of the entity’s failure to file its return(s) and pay taxes.
• An estimate of the tax liability for the lookback period.
• The type of tax or taxes to be covered by the VDA.
• Proposed VDA terms.

 

Individuals

 

If you are an individual requesting a VDA, you must include:

 

• A full and accurate statement of the individual’s activities in Montana for the five filing periods before your VDA date.
• All addresses at which the individual resided for the five immediately preceding  filing periods.
• The number of years the individual maintained a resided in Montana.
• An explanation of the individual’s failure to file its return(s) and pay taxes.
• An estimate of the tax liability for the lookback period.
• The type of tax or taxes to be covered by the VDA.
• Proposed (and binding) VDA terms.

 

Executing

 

The Department will send a copy of the VDA to you or your representative after the terms of the agreement are finalized. You then have:

 

• 45 days to sign the VDA,
• 15 days from the signed date to return the signed VDA to the Department, and
• 90 days from the date the Department signs the VDA to:

 

• • Register with the Secretary of State (if applicable),
  • Submit your tax returns, and
  • Pay the taxes and interest you owe.

 

Upon receipt, the Department will issue you a bill for the interest owed.

 

If your business is a partnership with over 100 partners, you must e-file all returns for periods beginning after December 31, 2013.

 

You or your representative will be notified if your VDA request is denied.

 

 

Violations

 

The Department can void the VDA if the qualified entity or individual:

 

• Misrepresents material facts relevant to the agreement;

• Fails to file returns or pay taxes and statutory interest for the lookback period within the time specified in the VDA;
• Cancels an installment payment arrangement; or
• Fails to continue to comply with Montana tax laws.

 

If the VDA becomes void, the entity or individual may be responsible for paying the penalties waived under the VDA.

 

 

Related Laws

 

Administrative Rules of Montana 42.2.304 and 42.2.310.