Voluntary Disclosure Program Information
The Voluntary Disclosure Program (VDP) provides a safe harbor for taxpayers who discover they have unpaid state tax obligations. In real estate, common undisclosed tax liabilities include: commercial rent tax (§212.031 at 5.5%) that was not collected or remitted on commercial lease payments, documentary stamp tax (§201.02) on transactions that were not properly documented or reported, and intangible tax on mortgage obligations that were not properly taxed. The VDP offers: waiver of penalties (which can be substantial), limited look-back period (typically 3-5 years rather than the full statute of limitations), and a cooperative resolution process (rather than adversarial audit). The VDP is not available to taxpayers who are already under audit or investigation.
Florida Legal Definition
Florida's Voluntary Disclosure Program is administered by the Department of Revenue (DOR) under the authority of Florida Statutes §213.21. Under the VDP, the DOR may: compromise penalties and interest, limit the assessment period (typically to 3 years for voluntarily disclosed liabilities), and enter into a written agreement setting forth the terms of the disclosure. The application may be filed anonymously through a representative (§213.21(4)), allowing the taxpayer to evaluate the terms before revealing their identity. The program applies to all taxes administered by the DOR, including: sales and use tax (commercial rent tax), documentary stamp tax, intangible tax, and corporate income tax.
How It's Used in Practice
In practice, attorneys advise clients to participate in the VDP when undisclosed tax liabilities are discovered. The attorney: evaluates the potential liability (calculating the unpaid tax, interest, and potential penalties), determines whether the VDP is available (the taxpayer must not be under audit), files the VDP application anonymously (allowing the taxpayer to evaluate the terms before committing), negotiates the look-back period and payment terms with DOR, and completes the disclosure and payment. Common scenarios include: landlords who discover they have not been collecting and remitting commercial rent tax, property owners who discover documentary stamp tax was not properly paid on a prior transaction, and businesses that discover unreported use tax on equipment purchases.
Key Takeaways
- VDP allows voluntary payment of undisclosed state taxes with penalty waiver.
- Common in real estate: uncollected commercial rent tax and doc stamps.
- Anonymous application available through §213.21(4).
- Limited look-back period: typically 3 years.
- Not available to taxpayers already under audit.
Disclaimer: The information and opinions provided are for general educational, informational or entertainment purposes only and should not be construed as legal advice or a substitute for consultation with a qualified attorney. Any information that you read does not create an attorney–client relationship with Barnes Walker, Goethe, Perron, Shea & Johnson, PLLC, or any of its attorneys. Because laws, regulations, and court interpretations may change over time, the definitions and explanations provided here may not reflect the most current legal standards. The application of law varies depending on your particular facts and jurisdiction. For advice regarding your specific situation, please contact one of our Florida attorneys for personalized guidance.
Business Attorneys
Real Estate Attorneys
Litigation Attorneys
Estate Planning Attorneys
Business Sale Closings
How to Sell a Business in Florida
Contact Information:
Tel: 941-867-7818
Email: info@barneswalker.com
Trust • Experience • Results