Los Angeles Provides Information on Voluntary Disclosure Program

The Los Angeles Office of Finance has provided information on the voluntary disclosure program that began on October 4, 2011. The program is offered to qualified taxpayers who have not registered or paid the Los Angeles business tax. To qualify for the program, a business must be engaged in business in Los Angeles; not have previously applied for a business tax registration certificate, have been registered with the Office of Finance, or filed a business tax renewal form; not have previously been contacted by the Office regarding Los Angeles business tax liabilities or be under audit for said liability; voluntarily apply for the program, prior to any unilateral contact with the Office and file an application for a voluntary disclosure agreement (VDA) and a full and accurate statement of activities within Los Angeles for the eight preceding annual tax periods; fully cooperate with an investigation of the taxes at issue in the VDA, including providing all books and records to the Office, and not have failed to register and pay the business tax as a result of fraud or intent to evade the Los Angeles Municipal Code. Effective October 4, 2011 through October 3, 2012, the look-back period for making an assessment of prior business taxes is limited to three years for qualifying businesses. Beginning October 4, 2012, the period is then limited to five years. Penalties on late payment of taxes may be waived for qualifying businesses. Applicants can also obtain a written opinion on whether or not the Office would be inclined to approve a voluntary disclosure request based on information presented anonymously. Applications for the program must be submitted to the Office. The application form and instructions are available on the Office’s website. If applicants wish to remain anonymous, they may have a representative contact the Office. Any business entering into a VDA must fully disclose all material facts pertaining to its tax liability. Once the agreement is signed, the business has 30 days to file annual tax renewal forms and pay all taxes and interest. The business must also agree to continue filing annual tax renewal forms and pay any business tax due in the future. The VDA will be null and void if the business misrepresents material facts provided regarding the agreement, doesn’t file annual renewal forms or pay business tax for the periods covered in the agreement, or defaults on an installment payment plan for the taxes covered in the agreement. Questions regarding the program can be directed to Ms. Teresita Diaz at [email protected]. (Voluntary Disclosure Program – Unregistered Businesses, City of Los Angeles Office of Finance, October 2011)

Posted on October 24, 2011