Introduction
Voluntary Disclosure Agreements (VDAs) are a common tool for resolving large historical tax liabilities, as they limit the liability period to the last four years and often provide penalty relief. However, to qualify for a VDA, businesses CANNOT have already submitted a tax registration or collected tax from customers in the jurisdiction.
Because VDAs typically take three to six months to complete, you may find yourself in a situation where you need to begin calculating and collecting tax from customers in a jurisdiction where you are actively pursuing VDAs without disrupting your ongoing VDA negotiations.
This guide explains how to manage tax registration through Anrok while your VDA processes are underway.
Tip
Anrok partners with several consulting partners who can help you execute VDAs with competitive rates. For Anrok filing partners, we provide the data lift that VDAs incur, allowing our partners to focus more on the value drivers of VDAs, including state negotiation, project management, and taxability determinations. Our partners could also have access to all of the detailed reporting you need to file historical returns as part of your VDA. You can submit this form to be connected with one of our preferred consulting partners.
Step 1
Indicate VDA pursuit in the jurisdiction
To start collecting sales tax in a jurisdiction where you are concurrently pursuing a VDA, start by clicking the Get compliant button on the Jurisdictions page to begin the compliance process. This will take you to the standard jurisdiction compliance workflow that you're familiar with. See Get compliant in a jurisdiction.
When Anrok asks if you are pursuing a Voluntary Disclosure Agreement for any of the states during the registration process, make sure to indicate your VDA pursuit. This step is crucial, as it ensures your registration is processed with the appropriate VDA considerations in mind.
Lastly, to calculate tax on transactions and collect tax from customers while your VDA is processing, you will need to indicate the tax calculation start date (i.e., the date you want Anrok to begin calculating tax) and the collect from customer start date (i.e., the date you want Anrok to begin syncing tax calculations to your customer-facing transactions for collection from customers). These dates will usually be either the date your registration was submitted (i.e., today's date), the date your VDA was submitted, or the last date of VDA coverage (if available).
Important
Unless you want Anrok to provide all of the detailed reporting needed to file your VDA or prepare and file individual tax returns for each missed period under the executed VDA, it is usually not recommended to select a date before your VDA was submitted (or the last date of VDA coverage), since tax will be unnecessarily calculated by Anrok on transactions covered by your VDA. These transactions would also be considered billable and included on your next Anrok billing statement. See Review your billing statements.
Note
If you select a tax calculation start date but choose not to begin syncing tax to your customer-facing transactions, the jurisdiction will enter a Paid by seller status. In this status, the responsibility of paying the sales tax calculated will be absorbed by your organization on behalf of your customer.
Step 2
Confirm the VDA's timeline and tax collection preferences
Once you indicate that you're pursuing a VDA, our system will automatically notify our Registration team of your VDA pursuit status. This ensures that your case receives the specialized attention it requires from the start.
A member of our team will contact you directly from registrations@anrok.com to initiate the coordination process. During this initial contact, they will work with you to confirm the specific details of your Voluntary Disclosure Agreement process, including the relevant jurisdiction, expected timelines, and any additional requirements that need to be addressed.
The team will then focus on timeline coordination to ensure our registration process aligns seamlessly with your VDA negotiations. This includes coordinating start dates for tax calculation and collection that work with your business needs and the VDA timeline. This personalized approach ensures that your registration process supports rather than complicates your voluntary disclosure efforts.
Step 3
Manage the jurisdiction's sales tax registration status
While your VDA is in progress, the affected jurisdiction will remain in an status on the Jurisdictions page, with "Complete VDA" under Actions. This status serves as a visual indicator that the sales tax registration is pending completion of your voluntary disclosure process and requires your attention before moving forward.
During this period, Anrok will postpone enabling filing capabilities for this jurisdiction until you notify us that your VDA process is complete. This ensures that no premature filing occurs that could interfere with your ongoing negotiations or voluntary disclosure terms.
In this process, you'll be responsible for keeping clear communication and control over when to proceed with full registration and filing. This approach gives you the flexibility to manage your VDA timeline while ensuring that Anrok is ready to activate your tax compliance capabilities as soon as you're ready to move forward. See Check-in on processing registrations.
Step 4
Monitor tax calculation and collection in the jurisdiction without filing
Here's where Anrok's flexibility becomes particularly valuable in supporting your VDA process. We can activate tax calculation and collection on your preferred start date, allowing you to begin collecting the appropriate taxes from customers immediately. This ensures you're compliant with tax collection requirements while your voluntary disclosure agreement is still being finalized.
Meanwhile, filing capabilities stay turned off until your VDA is completely finalized. This strategic approach prevents any premature filing that could complicate your ongoing negotiations or conflict with the terms being established in your voluntary disclosure agreement.
During this period, all transactions are carefully tracked and remain from any tax returns, listed on the Transactions page under the Unassociated tab. This means you're building a complete record of your tax activity without creating any filing obligations that might interfere with your VDA timeline or requirements.
Tip
If you initially opted for the jurisdiction to enter a "Paid by seller" status, but now want to begin collecting tax from customers, you have the option to update your tax collection method and start date. See Change a jurisdiction's tax collection method.
Step 5
Notify Anrok of the VDA's completion
During the VDA waiting period, it's essential to closely monitor your VDA progress and notify Anrok immediately when your agreements are finalized. This proactive communication ensures we can quickly transition your account to full compliance status without any delays.
When your VDA process is complete, inform the Registrations team of the completion and provide us with the specific date to enable filing. This should be the date where your VDA coverage ends and regular filing obligations begin. We will enable filing capabilities in the affected jurisdiction based on the timeline you provide. You can submit this form to notify our registration team of the VDA's completion.
The transition to full filing capability is designed to be seamless once all necessary components are in place. When filing is enabled, the jurisdiction will move to a status, and your first returns will be generated. All previously
transactions from the waiting period will be properly categorized and included in the appropriate returns. This ensures complete accuracy and compliance from the first day of your regular filing schedule. Once the returns are generated, they will be listed on the Returns & payments page with a
status. You will then be able to review and approve them for filing. See Tips for filing returns with Anrok.