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Five Helpful Consulting Tips to Complete a State Tax Voluntary Disclosure Program

Updated: May 30, 2023




The difficultly in voluntary disclosure programs (“VDA”) doesn’t lie in filling out forms, but rather managing the often long and tedious process. With having to gather specific data, tracking your progress and the state responses, and tacking deadlines, the process can get exhausting.

However, there are a few actions a practitioner can take to make the process proceed more smoothly.


Put Due Dates on You, Your Teams, And Your Client’s Calendar

Managing deadlines for one VDA may not be very challenging, however, managing deadlines for multiple VDA’s for one or more clients can be difficult without a system to keep track of the deadlines. Some tax professionals use an excel document to track when certain forms or data requests are due. The problem with this method, however, is that a tax professional may not actually look at the document every day. But, the one thing all professionals do, is look at their calendars.

Therefore, we recommend tracking VDA deadlines on a calendar. For each separate deadline, try creating an all-day appointment set to “free” availability. Make sure to color code it as a specific color that denotes it a s a deadline, such as red. Once completed, you can change the color of the appointment to indicate it has been completed. We like using this method because when you look at your next weeks appointments, you’ll be able to see exactly what is coming up on the calendar, and if it is completed.

Also, we recommend that you label the appointment with the client’s name, the state, and the document or task due. Furthermore, inviting other participants, such as your client or a team member to the appointment, everyone on the team will be able to readily identify deadlines, which would eliminate a lot of progress emails to the team.


Keep A Communication and Work Process Log

Keeping a log of information from all your calls and emails based on a specific state is extremely useful. A quick sentence or two for each interaction with the client or the state helps you keep track of where you are in the process, as well as keep track of the important information.

Moreover, making notes on the data your client provides you will be helpful as well. Whether the information comes from the client, or your observations and process, it will help you jump back into the data when you don’t work in it for a while.


Fill Out All the Forms at the Same Time as the Application

Gathering all the information you need to fill out the VDA application, registrations, and any other forms the state requires, will allow you to fill out all – or most- of the documents right away. You may think this is overkill, but in reality, it helps you manage your time. Instead of rushing to fill out forms a few days before the deadline, you can get your client’s signature the moment the state accepts your application. Thus, making the process go faster and impressing your clients with how fast you can move.

Most of the time, the information you need are facts of the situation, rather than monetary information. Therefore, putting together a questionnaire for the client to fill out could save both you and them time in gathering that information.


Make a State Task List

After receiving your acceptance letter, make a list of items that needs to be completed with their due dates. This list is usually included in the acceptance letter, and it will help you track your progress for the VDA. For instance, say you have 3 documents due on a specific due date: a power of attorney, questionnaire, and the returns. You can make notes on where you are in the progress of each of these documents.

Keeping a detailed list of steps will help you organize and prioritize your tasks during the VDA. You will know exactly what needs to be done, and how long it should take to complete.


Get the Returns Completed ASAP

Don’t wait until the last minute to get the information for your clients VDA returns. As soon as your client can provide them, you should get that information and start crafting the returns. It doesn’t matter how long the returns sit for, the data wont change. This will save you time later, and it will give your clients or teammates enough time to review the returns before submission.


 

About The Author

Kristina Cassone-Rhodes has worked in state and local taxes for more than 5 years. She currently owns her own consulting firm, Cassone Consulting LLC, and is a co-founder of Peper (Formally known as TaxStream LLC). She has a J.D. from the University of Montana and an LL.M in Taxation from Boston University.

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