La. Admin. Code tit. 61 § III-2103

Current through Register Vol. 50, No. 9, September 20, 2024

Section III-2103 - Voluntary Disclosure Agreements

A. Definitions. For purposes of this Section, the following terms have the meanings ascribed to them.

Applicant - any association, corporation, estate, firm, individual, joint venture, limited liability company, partnership, receiver, syndicate, trust, or any other entity, combination or group that submits or arranges through a representative for the submission of an application to request a voluntary disclosure agreement for a tax administered by the department. If the application is submitted through a representative, anonymity of the applicant can be maintained until the voluntary disclosure agreement is executed by the taxpayer and the secretary.

Application - a completed "application to request voluntary disclosure agreement" (Form R-60010) or an "application for multistate voluntary disclosure" filed with the Multistate Tax Commissions National Nexus Program and all supplemental information including, but not limited to, cover letters, schedules, reports, and any other documents that provide evidence of the applicants qualification for a voluntary disclosure agreement. Supplemental information requested by the department and timely provided by the applicant shall be considered part of the application.

Application Date - the date a fully completed application requesting a voluntary disclosure agreement is received by the department. Supplemental information requested by the department and timely provided by the applicant shall not extend or delay the application date.

Delinquent Penalty - any specific penalty imposed pursuant to R.S. 47:1603 or 1604.1 as a result of the failure of the taxpayer to timely make any required return or payment.

Department - the Louisiana Department of Revenue.

Look-Back Period-a period for which a qualified applicant agrees to disclose and pay the tax and interest due. The look-back period shall be as follows.

a. Except as provided in Subparagraphs b through e, the look-back period shall include the current calendar year up to the date of registration with the department and the three immediately preceding calendar years.

b. For taxes collected or withheld and not remitted, the look-back period shall include all periods in which tax was collected or withheld and not remitted. This look-back period shall not affect the look-back period described in Subparagraph a. of this Paragraph for undisclosed liabilities unrelated to tax collected or withheld and not remitted.

c. For discontinued, acquired, or merged entities, the look-back period shall include undisclosed liabilities in the last calendar year in which the qualified applicant had nexus within this state and the three immediately preceding calendar years.

d. For withholding taxes associated with misclassified employees, the look-back period shall include the current calendar year up to the date of the application and the three immediately preceding calendar years. This look-back period shall not apply to any taxes actually withheld from an employee and not remitted.

e. The secretary and the applicant may agree to adjust a look-back period to include other years.

f. The look-back period(s) shall be established at the time the secretary or his authorized representative signs the voluntary disclosure agreement.

Misclassified Employees-a class or classes of workers who were consistently treated as independent contractors or other non-employees by the taxpayer for the previous three years and for which the taxpayer filed all required IRS Forms 1099-NEC, 1099-MISC or equivalent form, consistent with the non-employee treatment.

Non-Qualified Applicant - includes any taxpayer who:

a. is registered with the department as of the application date but failed to file returns or underreported the amount due for a tax for which a voluntary disclosure agreement is requested;

b. submitted returns, extensions, payments, or was registered more than 60 days prior to the application date for a tax for which a voluntary disclosure agreement is requested;

c. has been contacted by the department concerning a liability regarding a tax for which a voluntary disclosure agreement is requested, including but not limited to a potential liability or contact for the purpose of performing an audit of the taxpayers records; or

d. is affiliated with another entity that has been contacted by the department for the purpose of performing an audit of the affiliated entity's records. A non-qualified applicant under this subparagraph may become a qualified applicant after the audit of the affiliated entity has been completed, provided the applicant is not disqualified under the criteria listed in Subparagraphs a through c of this Paragraph.

Qualified Applicant-any taxpayer subject to the reporting and payment of a tax imposed by the state of Louisiana that is not disqualified under Subsection B of this Section.

Secretary - the secretary of the Louisiana Department of Revenue and any duly authorized representative(s).

Signing Date - the date the voluntary disclosure agreement is signed by the secretary or his authorized representative.

Undisclosed Liability - a tax liability that became due during the look-back period and which has not been determined, calculated, researched, identified by or known to the department at the time of disclosure and which would likely not be discovered through normal administrative activities. The undisclosed liability must exceed $500 during the look-back period to qualify for consideration of a voluntary disclosure agreement. The secretary has the discretion to conduct an audit of the applicants records to confirm the amount of the undisclosed liability.

Voluntary Disclosure Agreement - a contractual agreement between a qualified applicant and the secretary wherein the qualified applicant agrees to pay the tax and interest due on an undisclosed liability, and the secretary agrees to remit or waive payment of the whole or any part of the penalty associated with that liability and to restrict collection of prior liabilities to the look-back period, except for periods in which tax was collected and not remitted.

Withholding Tax-income tax that is required to be deducted or withheld by an employer from the wages paid to an employee in accordance with R.S. 47:112.

B. Disqualification. Any applicant who meets one or more of the criteria below shall be disqualified from entering into a voluntary disclosure agreement:

1. The applicant is registered with the department as of the application date but failed to file returns or underreported the amount due for a tax for which a voluntary disclosure agreement is requested.

a. Registration with the department for reporting and payment of any tax for which a voluntary disclosure agreement is not being requested will not disqualify a qualified applicant from entering into a voluntary disclosure agreement.

2. The applicant submitted returns, extensions, payments, or was registered with the department within three years of the application date for a tax for which a voluntary disclosure agreement is requested.

3. The applicant is requesting a voluntary disclosure agreement for withholding tax due for misclassified employees and:

a. the workers for which the agreement is requested do not qualify as misclassified employees; or

b. the applicant actually withheld taxes from wages paid to workers included in the class or classes for which a voluntary disclosure agreement request is being made; or

c. the applicant has not provided proof of worker's compensation coverage for all employees.

4. The applicant has been contacted by the department concerning a liability regarding a tax for which a voluntary disclosure agreement is requested, including but not limited to a potential liability or contact for the purpose of performing an audit of the taxpayer's records.

5. The applicant is affiliated with another entity that has been contacted by the department for the purpose of performing an audit of the affiliated entity's records. An applicant may become a qualified applicant after the audit of the affiliated entity has been completed, provided the applicant is not disqualified under any other criteria.

C. Acceptance of Offer to Enter into Voluntary Disclosure Agreement

1. After the secretary has reviewed the application and determined from the information included therein that the applicant qualifies for a voluntary disclosure agreement, the secretary shall send a copy of the agreement to the qualified applicant or the qualified applicant's representative for signature.

2. The qualified applicant or qualified applicant's representative, acting under the authority of a power of attorney, shall sign the agreement and return it to the secretary within 30 calendar days of the postmark or e-mail date, or within any extension of time authorized by the secretary beyond 30 calendar days from the postmark or email date.

3. After the signed agreement is received from the applicant, the secretary or his authorized representative shall sign the agreement and return a copy of the agreement to the applicant which has been signed by both parties.

4. If the application was submitted to the Multistate Tax Commission, the applicant shall return signed agreements in accordance with policies established by the commission.

D. Waiver or Remittance of Payment of Penalty

1. After all tax and interest due for the look-back period have been paid, the delinquent penalties shall be waived, unless the tax disclosed was collected or withheld but not remitted.

2. Where the tax was collected or withheld but not remitted, the secretary may consider waiving payment of the whole or any part of the delinquent penalties on a case-by-case basis.

E. Payment of Tax, Interest, and Penalty Due

1. All tax due for the look-back period must be paid within 60 calendar days of the secretary's signing date of the voluntary disclosure agreement or within any extension of time authorized by the secretary beyond 60 calendar days of the signing date. All schedules or returns required by the secretary to show the amount of tax due must be included with this payment.

2. For purposes of withholding tax due for misclassified employees, any wages timely reported on a Louisiana individual income tax return filed by any worker in the class or classes of workers identified in the application as verified by the Department of Revenue shall be excluded for purposes of calculating the liability due by the qualified applicant.

3. The secretary shall compute the interest and penalty due for the tax disclosed by the applicant and send a schedule by mail or email to the applicant or his representative showing the amount of tax, interest and penalty due. The applicant must submit payment of the full amount of the interest and any penalties not waived within 30 calendar days from the postmark or e-mail date of the schedule or, if applicable, within any extension of time granted by the secretary. If payment of the full amount due has not been received at the expiration of such time, the secretary may void the agreement.

F. The secretary may disclose tax information to the Multistate Tax Commission or any political subdivision of the state which has entered into an information exchange agreement with the department in order to coordinate the delivery and acceptance of applications for voluntary disclosure agreements. Any information so furnished shall be considered and held confidential and privileged by the Multistate Tax Commission or the political subdivision to the extent provided by R.S. 47:1508.

G. The terms of the voluntary disclosure agreement shall be valid, binding, and enforceable by and against all parties, including their transferees, successors, and assignees.

H. The secretary reserves the right to void the voluntary disclosure agreement if the applicant fails to comply with any of the conditions outlined in the agreement.

La. Admin. Code tit. 61, § III-2103

Promulgated by the Department of Revenue, Policy Services Division, LR 41558 (3/1/2015), Amended LR 49913 (5/1/2023).

AUTHORITY NOTE: Promulgated in accordance with R.S. 47:1502, R.S. 47:1511, R.S. 47:1580, and R.S. 47:1603.