One critical element which shouldn’t be ignored when it comes to your business’ operations and finances are your business’s taxes. Particularly your business sales taxes. While you may currently believe that it’s highly unlikely that the government and your state will find out about any backdated taxes which you have failed to pay, the truth is that many businesses of all sizes are regularly audited by independent auditors. Who will comb through a business’s financial records with a fine-tooth comb in order to find any evidence that a business has failed to pay taxes which they were due to pay.
If you are interested in finding out about how using a VDA agreement in order to pay your business’ overdue taxes, without being heavily financially penalized can help your business, you’ve come to the right place. Simply continue reading to discover some of the key benefits of opting to negotiate a VDA agreement for your business’ benefit:
The benefits of using a VDA agreement:
You can receive penalty abatements:
You are probably aware that there are steep fines that are dished out to businesses who do not pay their taxes such as their sales taxes. But what you may not be aware of is the fact that if you negotiate a VDA agreement with favorable terms, that you may receive valuable abatements on these potential fines. This means that you won’t be made to pay any late penalties and instead will only need to pay the principle of your backdated tax. However, you will also have to pay tax on your outstanding tax. So the more years that you wait to negotiate a VDA the more tax that you’ll actually end up paying. So when possible, make sure to pay your late taxes within 1-2 years, instead of waiting 3-4 years to pay the taxes due. So that you’ll pay less interest.
You can negotiate the terms of your agreement with your state:
Whether you’re trying to negotiate tax abatements on sales tax in your state or another state in which your business is deemed a nexus which has a large financial interest in another state, you’ll have the power to negotiate the terms of your VDA’s agreement with the state in question. If you’re worried that they may not be open to accepting the terms of your agreement, the good news is that in most cases they are open to accepting business terms as at the end of the day all that they want is their tax and don’t want to get into lengthy disputes with countless businesses. Which is obviously not in their best interests.
You can apply for a VDA agreement anonymously:
One reason that some business owners don’t apply for a VDA in order to handle their taxes is that they falsely assume that their name and their business’ name will need to be on the application. However, you can choose to remain anonymous.
So if you are scared about the potential ramifications of not sorting out taxes which your business owes your state or other states from the past 3-4 years it’s worth negotiating a VDA.