October 28, 2010

State Offers Incentives for Voluntary Tax Compliance

The state’s Voluntary Disclosure Program gives businesses and individuals who have not complied with state tax laws an incentive to do so. Businesses and individuals who did not register for or pay Connecticut taxes, or failed to report some or all of their taxable income or gross receipts, may ask the Department of Revenue Services (DRS) to permit them to register and pay the amount they owe. In exchange, they can receive a penalty waiver, limit their look-back period for taxes owed, and avoid the discovery process involved in a state investigation and audit.  To be accepted into the program, a taxpayer must, among other things, give DRS a written admission of liability and statement of the amount of potential tax liability.  More information about the program and its requirements and benefits is available on DRS’s website. The website also provides contact information for taxpayers wishing to contact DRS about the program anonymously.