Slides from our webinar featuring guest speaker Ned Lenhart of Ampersand Accounting, LLC

1. G u e s t s p e a k e r : N e d A . L e n h a r t , C P A
August 29, 2017

2. By Ned A. Lenhart, MBA CPA
Ampersand Accounting, LLC
Voluntary Disclosure
Agreement Complexities

3. • Behind on Sales Tax: Options to Move Forward
• How Much Do You Owe –Cash Flow Decisions
• Voluntary Disclosure Agreement Overview
• The Anatomy of a VDA
• VDA Costly Mistakes to Avoid
• Time-Frame to File a VDA
• MTC VDA/Amnesty Program
• LIVE Q & A

4. • Apply for Sales Tax Permits to Collect and Remit
1. Past Date on Sales Tax Application
• Pay Past Sales Tax + Penalties + Interest
• File Past Returns
2. Current Date on Sales Tax Application
• NOT Recommended
• Potential FRAUD Penalties
3. File Voluntary Disclosure Agreement
• Waive Penalties
• In most cases you obtain a sales tax permit in the process
• Look back period is shortened
• Must follow the correct process

5. • Determine the following:
• States with Sales Tax Nexus
• Stock/Inventory (Amazon FBA – 25 States)
• Home State
• Other Factors?
• First Had Nexus in These States
• Total Sales x Sales Tax Rate x Penalties x Interest
• Example
• $10,000 Sales x 7% Sales Tax x 30% Penalties x 3%
• Determine this for ALL States You have Nexus

6. • Tax application asks for date of first sale in state.
• Liability in many states with nexus and taxable sales adds up!
• Knowledge that nexus exists is NOT a factor in historical liability.

7. • May have income tax nexus also if business has property in state.
• Income tax nexus threshold is different than sales tax
• Depending on business, income tax liability may be larger than sales
tax.
• Knowledge that nexus exists is NOT a factor in historical liability.

8. • No statute of limitations for unfiled returns (sales or
income)
• Prospective filing does NOT prevent assessment of
penalties for unfiled periods
• Restructuring business won’t generally limit liability
• Penalties can range from 10% to 50% of tax
• Interest rates range from 5% to 18% per-year

9. • Contractual agreement with a state
• Taxpayer benefits:
• Limited look back period of taxes owed but not collected
collected
• Reduce or eliminate penalties on taxes paid
• Most states allow taxpayers to remain anonymous until VDA complete
• Taxpayer agrees to register and collect tax on future taxable sales.
taxable sales.

10. • Most states have 36 month look-back
• Nevada has 8 year and Hawaii has 10 year
• Texas 48 months (abates penalty and interest)
• Washington 48 months plus current year

11. • Edibility Requirements
• Taxpayer CANNOT have been contacted by state-at any time!
• Taxpayer CANNOT be under audit
• Taxpayer generally CANNOT already be registered for tax
• If tax has been collected, special rules apply

12. • Key States with Payment Plans (Helps Cash Flow):
• California
• Florida
• Illinois
• New York
• Texas
• Generally 25% down and 24 month payment plan
• Rules vary by state

13. • Application filed according to state policy
• Named or anonymous
• State respond with…
• VDA contract,
• Nexus questionnaire, or
• Letter with instructions
• Processing Time Frame: 2 weeks to 60 days
• Response Time Frame: 30 to 45 days
• Complete Returns & Pay Sales Tax Time Frame: 60 to 90 days
• Time frame greatly effected by taxpayer data being in order

14. • Not Knowing Your Numbers First (exempt sales)
• Not Knowing the Time Frame for the Process
• Not Collecting and Remitting Tax During the Process
• Not Knowing When NOT to do a VDA
• Attempting to do VDA on your own!

15. • August 17 to October 17
• 24 states participating in program
• Multistate Tax Commission (MTC) acting as clearing house for applications.
• Agreements are issued by the state not the MTC
• Companies can participate in all or some of the states
• Most states giving total forgiveness of sales and income tax
• Limited to companies with inventory in state. Primarily FBA

16. • Applications are submitted online at the MTC website
• Submitted to the state anonymously by the MTC
• Can be submitted by taxpayer or representative
• Must provide estimates of sales tax and income tax forgiven
• Agree to register and collect tax on transactions starting December 1, 2017
• 14 states non-FBA states-need to evaluate benefit
• Need to have process in place for future compliance

17. • Some vocal FBA sellers arguing that MTC program is not valid and that no
tax is due
• Every taxpayer will need to evaluate the risk they have and whether they
can afford to fight an assessment if caught by state.
• States can legally enforce tax assessments on out-of-state sellers
• States can attach personal assets of owners and officers

18. Schedule and Evaluation and
Recommendation Appointment
E-mail: support@Ampersandaccounting.com
Questions

19. August 29, 2017