Voluntary Disclosure Agreements

Quantifying and Eliminating Historical Tax Exposure

In the post-Wayfair era, many high-growth companies discover they inadvertently triggered nexus in multiple states years before their first filing. This creates a “shadow liability”—unrecorded tax, interest, and penalties that can stay open indefinitely because a return was never filed. For companies preparing for an exit or those that have recently been acquired, this exposure is a significant threat to deal value and institutional credibility.

We provide the technical path to a clean slate. A Voluntary Disclosure Agreement (VDA) is a proactive, negotiated settlement with state tax authorities. At Calvetti Ferguson, we act as your strategic advocate, utilizing the VDA process to limit look-back periods, waive aggressive penalties, and establish a compliant foundation. We don’t just file forms; we negotiate the terms that protect your capital and your reputation.

The Strategic Advantage of a VDA

A VDA is a sophisticated alternative to a state-initiated audit. It allows the taxpayer to control the narrative and define the scope of the disclosure.

Capital Preservation & Penalty Waiver

The primary financial driver of a VDA is the significant reduction in total out-of-pocket costs compared to an audit.

• Limited Look-Back Period: While an audit can often go back indefinitely for non-filers, a VDA typically limits the look-back period to three or four years, immediately erasing years of potential liability.

• Abatement of Penalties: In exchange for coming forward voluntarily, most states will waive 100% of the penalties, which can often account for 25% to 50% of the total tax bill.

• Interest Reduction: Some jurisdictions offer reduced interest rates for voluntary disclosures, further preserving your working capital.

Institutional Readiness & Transaction Security

For PE-backed portfolios, a VDA is an essential tool for “cleaning up” an asset before a liquidity event.

• Eliminating Successor Liability: By resolving historical issues through a VDA, you protect the buyer from “inheriting” undisclosed tax risks, ensuring a smoother Quality of Earnings (QofE) process.

• Audit Protection: Once a VDA is finalized, the disclosed periods are generally closed to further audit, providing a “fresh start” for the entity.

• Anonymous Negotiations: In many states, we can negotiate the terms of your VDA anonymously, disclosing your company’s identity only after a favorable agreement is reached.

Why Choose Calvetti Ferguson?

We offer a senior-led approach to SALT advisory that bridges the gap between technical accounting and strategic negotiation.

• PE & M&A Specialization: We are experts in the high-velocity “cleanup” required during an acquisition or in preparation for an exit. We know how to prioritize the states with the highest risk profiles.

• Integrated SALT Platform: We don’t view a VDA in isolation. We coordinate the process with your Sales Tax Nexus Study to ensure your new compliance footprint is robust and sustainable.

• Multistate Advocacy: Our team has extensive experience negotiating with tax authorities in all 45 states that impose sales tax, ensuring you get the most favorable terms available in each jurisdiction.

Ready to Resolve Your Historical Tax Exposure?

Don’t let an unidentified liability wait for an auditor to find it. Let’s build the transparent, high-integrity remediation plan your business deserves—partner with a firm that understands the intersection of tax remediation and enterprise value.

Contact Our Team