The purpose of the voluntary disclosure program is to encourage unregistered business entities and persons to voluntarily contact the Department regarding unreported Iowa tax liabilities.
The Iowa Department of Revenue (IDR) offers a Voluntary Disclosure Program, allowing license and/or permit holders the opportunity to self-report actual or potential violations of laws and rules administered by IDR. In exchange for voluntary disclosure, license and/or permit holders may receive reduced penalties or other special considerations when and if IDR proposes administrative actions.
Which Taxes are Eligible?
The following taxes are eligible under the Voluntary Disclosure Program:
- Automobile Rental Excise Tax
- Cigarette & Tobacco Tax
- Corporation Income Tax
- Equipment Excise Tax
- Fiduciary Income Tax
- Franchise Tax
- Hotel Motel Excise Taxes (State and Local)
- Individual Income Tax (including School District Surtax)
- Local Option Sales Taxes
- Motor Fuel Tax
- Prepaid Wireless 911 Surcharge
- Sales & Use Tax
- Water Service Excise Tax
- Withholding Income Tax
Who is Eligible?
The Department has discretion to determine who is eligible for participation in the voluntary disclosure program. In making the determination, the Department may consider the following factors:
- The taxpayer must be subject to Iowa tax on Iowa-source income or have Iowa tax collection responsibilities and must have tax due;
- The taxpayer must not currently be under audit or examination by the Department or under criminal investigation by the Department;
- The taxpayer must not have had any prior contact with the Department or a representative of the Department which could lead to audit or assessment associated with the tax types or tax periods sought to be addressed under the program;
- The type and extent of activities resulting in Iowa-source income;
- Failure to report the Iowa-source income or pay any liability was not due to fraud, intentional misrepresentation, an intent to evade tax, or willful disregard of Iowa tax laws; and
- Any other factors which are relevant to the particular situation.
How Do I Apply?
To apply online:
- Go to GovConnectIowa
- Under the Refunds & Returns panel, select Submit a Voluntary Disclosure Proposal
- Follow the screen prompts and submit the proposal
To apply by mail:
You or your representative must submit a written proposal to:
Nonfiler Unit
Compliance Bureau
Iowa Department of Revenue
PO Box 10456
Des Moines, Iowa 50306-0456
You or your representative may initially contact the Department on an anonymous basis. Anonymity of the taxpayer can be maintained until the voluntary disclosure agreement is executed by the taxpayer and the Department.
The following information is helpful when submitting a proposal:
- The type of tax(es) being applied for.
- A statement that there has been no prior contact with the Department. Please note: per the Department’s standard practices, past contact with the Department relating to the tax type applied for makes an applicant ineligible for voluntary disclosure.
- Brief description of applicant's business activities.
- The date nexus was established for the tax type(s) applied for.
- If income tax is applied for, the applicant’s federal year end date for filings.
- The applicant’s entity type (such as Corporation, LLC filing as a partnership, Financial Institute, etc)
- If applying for permit tax (such as sales tax), a statement that tax has or has not been collected.
- If applying for sales tax, state whether nexus was established due to economic nexus only, or due to physical presence within Iowa. If applicant has nexus based upon both physical and economic presence, the applicant’s nexus start date would be the earliest start date of the two.
- A statement explaining why the applicant did not file returns when due.
What Happens Going Forward?
The voluntary disclosure program may be used by the Department and the taxpayer to report previous periods of Iowa-source income and to settle outstanding tax, penalty, and interest liabilities, but it must also ensure future tax compliance by the taxpayer.
Questions About Iowa Voluntary Disclosure?
- Review Department Rule 19.6: Voluntary disclosure agreements, or
- Email the Department, or
- Call 1-800-367-3388 or 515-281-3114, or
- Send a written request to:
Nonfiler Unit
Compliance Bureau
Iowa Department of Revenue
PO Box 10456
Des Moines, IA 50306-0456
Multi-state Voluntary Disclosure
If taxpayers have a liability in more than one state, they may consider applying for multi-state voluntary disclosure through the Multistate Tax Commission (MTC). More information about the MTC’s Voluntary Disclosure Program and the application for Multi-state Voluntary Disclosure are available at www.mtc.gov/Nexus-Program/Multistate-Voluntary-Disclosure-Program.
Voluntary Disclosure Program Guidelines
License and/or permit holders are encouraged to make voluntary disclosures as soon as any irregularity or instance of noncompliance is discovered in their business operations.
All voluntary disclosures must be in writing and sent to:
Iowa Department of Revenue
Alcohol & Tax Operations Division
Attn: Voluntary Disclosure
1918 SE Hulsizer Rd.
Ankeny, IA 50021-3941
Voluntary disclosures may be sent electronically to adminactions@iowaabd.com, however, a hard copy mailing is required. License and/or permit holders may also make oral disclosures to appropriate IDR officials if the required written disclosure is made within 10 calendar days of the verbal disclosure.
Any questions on the Voluntary Disclosure Program may be sent to adminactions@iowaabd.com.