State Voluntary Disclosure Programs for HNWIs: Resolving Past Due State Taxes

Last Updated: October 5, 2026

Next Scheduled Review: October 2027

Key Takeaways

California operates a statutory Voluntary Disclosure Program (VDP) under Cal. Rev. & Tax. Code § 19191–19193, offering a six-year lookback period and waiver of certain penalties for eligible out-of-state business entities and their shareholders, members, or beneficiaries that have not been contacted by the FTB.
New York administers its Voluntary Disclosure and Compliance Program under N.Y. Tax Law § 1700, authorizing the Tax Department to waive civil and criminal penalties for eligible taxpayers who disclose and pay overdue taxes, with a minimum six-year lookback for foreign bank account disclosures.
Texas offers a Voluntary Disclosure Agreement program through the Comptroller under Tex. Tax Code § 111.009, providing relief from penalties and, in most cases, interest for taxpayers that voluntarily report previously unpaid taxes, with a typical four-year lookback for franchise tax.
Florida‘s Voluntary Disclosure Program, administered by the Florida Department of Revenue, covers all taxes the agency administers, with a typical three-year lookback for most taxes and waiver of penalties except for collected but unremitted sales tax, which carries a reduced 5% penalty.
The Multistate Tax Commission (MTC) Multistate Voluntary Disclosure Program allows taxpayers to resolve liabilities with multiple states simultaneously through a uniform procedure, with each state determining its own lookback period.

Direct answer: A state voluntary disclosure program is a formal administrative process under which a taxpayer that has not filed required state tax returns comes forward voluntarily to disclose and pay past-due taxes in exchange for a limited lookback period, waiver of penalties, and in some states, protection from criminal prosecution. California, New York, Texas, Florida, Illinois, Pennsylvania, and Washington each operate voluntary disclosure programs under distinct statutory and administrative frameworks.

Cite This Article

Goldstein, A. (2026). State Voluntary Disclosure Programs for HNWIs: Resolving Past Due State Taxes. [Publication Name].

Alan Goldstein, “State Voluntary Disclosure Programs for HNWIs: Resolving Past Due State Taxes,” [Publication Name] (Oct. 5, 2026).

Introduction

High-net-worth individuals who have failed to file required state tax returns face potentially unlimited lookback periods, substantial penalties, and in extreme cases, criminal exposure. State voluntary disclosure programs provide a structured pathway to resolve past noncompliance on favorable terms. These programs are administered either statutorily (as in California and Connecticut) or administratively (as in Maryland and New York). The controlling authorities are state-specific: California under Cal. Rev. & Tax. Code § 19191–19193, New York under N.Y. Tax Law § 1700, Texas under Tex. Tax Code § 111.009, Florida under Fla. Stat. § 213.21, Illinois under 86 Ill. Admin. Code § 210.126, and Pennsylvania under 72 Pa. Stat. § 9701. The Multistate Tax Commission (MTC) coordinates multistate disclosures through its National Nexus Program under the Multistate Tax Compact. Federal constitutional limits under the Due Process and Commerce Clauses constrain state taxing authority, but the operative voluntary disclosure rules are creatures of state law.

What Is a State Voluntary Disclosure Program?

Direct answer: A state voluntary disclosure program is a formal administrative process under which a taxpayer that has not filed required state tax returns comes forward voluntarily to disclose and pay past-due taxes in exchange for a limited lookback period, waiver of penalties, and in some states, protection from criminal prosecution. Eligibility generally requires that the taxpayer has not been contacted by the state taxing authority regarding the undisclosed liability.

Statutory Basis

Direct answer: California’s VDP is codified at Cal. Rev. & Tax. Code § 19191–19193, limiting tax to a six-year lookback period. New York’s program is established under N.Y. Tax Law § 1700, authorizing the Tax Department to waive civil and criminal penalties. Texas’s program operates under Tex. Tax Code § 111.009. Florida’s program is administered under Fla. Stat. § 213.21.

California‘s VDP is codified at Cal. Rev. & Tax. Code § 19191–19193, and provides that the FTB will limit the imposition of tax to a six-year lookback period and may waive certain penalties for eligible business entities. New York‘s program is established under N.Y. Tax Law § 1700, which authorizes the Tax Department to waive civil and criminal penalties for taxpayers who disclose and pay overdue taxes. Texas‘s program operates under Tex. Tax Code § 111.009, providing relief from penalties and, in most cases, interest for taxpayers that voluntarily report previously unpaid taxes. Florida‘s program is administered under Fla. Stat. § 213.21, covering all taxes the agency administers. Illinois‘s program is codified at 86 Ill. Admin. Code § 210.126, limiting the statute of limitations to four years. Pennsylvania‘s program operates under 72 Pa. Stat. § 9701, limiting liabilities to three years plus the current year.

Historical Development

Direct answer: California enacted its VDP in 1994 and amended it in 2001 and 2011. New York established its Voluntary Disclosure and Compliance Program in 2008 through Chapter 57 of the Laws of 2008. Illinois’s VDP took effect January 1, 1993. The MTC Multistate Voluntary Disclosure Program has operated since the 1980s.

California enacted its VDP in 1994 and amended it in 2001 and 2011 through Chapter 543 of the Statutes of 2001. New York established its Voluntary Disclosure and Compliance Program in 2008 through Chapter 57 of the Laws of 2008, adding section 1700 of Article 36 to the Tax Law. Illinois‘s VDP took effect January 1, 1993, and is directed at taxpayers who have failed to file required tax returns. The MTC Multistate Voluntary Disclosure Program has operated since the 1980s as part of the Commission’s National Nexus Program.

Current Scope

Direct answer: The current scope of voluntary disclosure programs includes California, New York, Texas, Florida, Illinois, Pennsylvania, and Washington, each offering different lookback periods, penalty waivers, and eligibility requirements. Most programs limit the lookback period to three to six years, waive penalties, and require ongoing compliance.

The California VDP is open to C-corporations, S-corporations, trusts, and LLCs and their shareholders, beneficiaries, or members that are not qualified, registered, or organized in California and have not previously received a notice from the FTB requesting a tax return. New York‘s program covers all taxes administered by the Tax Department, including income, corporate, and sales tax, with a minimum six-year lookback for foreign bank account disclosures. Texas‘s program covers sales, use, franchise, and other taxes managed by the Comptroller, with a four-year lookback for franchise tax. Florida‘s program covers all taxes the agency administers, with a three-year lookback for most taxes. Illinois‘s program limits the statute of limitations to four years and eliminates civil fraud penalties for voluntarily disclosed information. Pennsylvania‘s program limits liabilities to three years plus the current year and waives penalties for most taxes. Washington has temporary voluntary disclosure programs available through December 31, 2026, and September 30, 2027, with a permanent program codified for the B&O tax beginning July 1, 2027.

Entity Reference Table

Entity	Full Name	Type	Binding Effect	Role in This Article
FTB	California Franchise Tax Board	State administrative agency	Binds California taxpayers; persuasive in CA courts	Administers California Voluntary Disclosure Program
NYS DTF	New York State Department of Taxation and Finance	State administrative agency	Binds New York taxpayers; persuasive in NY courts	Administers New York Voluntary Disclosure and Compliance Program
TX Comptroller	Texas Comptroller of Public Accounts	State administrative agency	Binds Texas taxpayers; persuasive in TX courts	Administers Texas Voluntary Disclosure Program
FL DOR	Florida Department of Revenue	State administrative agency	Binds Florida taxpayers; persuasive in FL courts	Administers Florida Voluntary Disclosure Program
IL DOR	Illinois Department of Revenue	State administrative agency	Binds Illinois taxpayers; persuasive in IL courts	Administers Illinois Voluntary Disclosure Program
PA DOR	Pennsylvania Department of Revenue	State administrative agency	Binds Pennsylvania taxpayers; persuasive in PA courts	Administers Pennsylvania Voluntary Disclosure Program
WA DOR	Washington State Department of Revenue	State administrative agency	Binds Washington taxpayers; persuasive in WA courts	Administers Washington Voluntary Disclosure Program
MTC	Multistate Tax Commission	Interstate compact agency	Binds participating states; persuasive in non-participating states	Coordinates multistate voluntary disclosures
U.S. Constitution	United States Constitution	Federal constitutional authority	Binds all state taxing authorities	Limits state taxation under Due Process and Commerce Clauses

Binding Effect and Legal Weight

Direct answer: State voluntary disclosure statutes such as Cal. Rev. & Tax. Code § 19191, N.Y. Tax Law § 1700, Tex. Tax Code § 111.009, Fla. Stat. § 213.21, 86 Ill. Admin. Code § 210.126, and 72 Pa. Stat. § 9701 are primary authority binding on taxpayers and state agencies. State regulations are primary authority binding on issuing agencies but subject to judicial review. Voluntary disclosure agreements are binding contracts between the taxpayer and the state.

Who Is Bound

Direct answer: California’s VDP statute binds the FTB and all eligible taxpayers. New York’s statute binds the NYS DTF and all eligible taxpayers. Texas’s program binds the Comptroller and all eligible taxpayers. Florida’s program binds the FL DOR and all eligible taxpayers. Illinois’s program binds the IL DOR and all eligible taxpayers. Pennsylvania’s program binds the PA DOR and all eligible taxpayers.

California‘s Cal. Rev. & Tax. Code § 19191 binds the FTB and all eligible taxpayers, with the FTB retaining the right to audit the taxpayer and assess additional tax if the disclosure is incomplete or inaccurate. New York‘s N.Y. Tax Law § 1700 binds the NYS DTF and all eligible taxpayers, with the Tax Department required to establish procedures and administer the program. Texas‘s Tex. Tax Code § 111.009 binds the Comptroller and all eligible taxpayers, with the Comptroller retaining authority to reject applications. Florida‘s Fla. Stat. § 213.21 binds the FL DOR and all eligible taxpayers. Illinois‘s 86 Ill. Admin. Code § 210.126 binds the IL DOR and all eligible taxpayers. Pennsylvania‘s 72 Pa. Stat. § 9701 binds the PA DOR and all eligible taxpayers.

Precedential Value

Direct answer: California Office of Tax Appeals decisions designated as precedential under Cal. Rev. & Tax. Code § 15676.5 are binding on the FTB. New York Tax Appeals Tribunal decisions are binding on the NYS DTF and Division of Tax Appeals. Texas Comptroller hearings are persuasive but not binding precedent. Florida circuit court decisions are binding on the FL DOR within the circuit.

California‘s OTA issues precedential decisions binding on the FTB under Cal. Rev. & Tax. Code § 15676.5. New York‘s Tax Appeals Tribunal decisions are binding on the NYS DTF and the Division of Tax Appeals under N.Y. Tax Law § 2016. Texas Comptroller hearings provide persuasive guidance but are not binding precedent. Florida circuit court decisions are binding on the FL DOR within that circuit but may be appealed to the Florida District Courts of Appeal. Illinois Circuit Court decisions are binding on the IL DOR within the circuit. Pennsylvania Board of Appeals decisions are binding on the PA DOR on remand.

Primary vs. Secondary Authority

Direct answer: State voluntary disclosure statutes and regulations are primary authority. State tribunal and court decisions are primary authority as adjudications. State agency publications, application forms, and guidance documents are secondary authority, persuasive in negotiations but not binding on courts.

Cal. Rev. & Tax. Code § 19191 is primary authority. N.Y. Tax Law § 1700 is primary authority. Tex. Tax Code § 111.009 is primary authority. Fla. Stat. § 213.21 is primary authority. 86 Ill. Admin. Code § 210.126 is primary authority. 72 Pa. Stat. § 9701 is primary authority. The FTB Form 4925, New York Voluntary Disclosure application, Texas Publication 96-576, and MTC Multistate Voluntary Disclosure Program Procedures are secondary authority .

Key Authorities and Cases

Direct answer: The controlling authorities for state voluntary disclosure programs vary by state: California’s Cal. Rev. & Tax. Code § 19191–19193, New York’s N.Y. Tax Law § 1700, Texas’s Tex. Tax Code § 111.009, Florida’s Fla. Stat. § 213.21, Illinois’s 86 Ill. Admin. Code § 210.126, Pennsylvania’s 72 Pa. Stat. § 9701, and Washington’s RCW 82.32.410.

California Statutory Authority

Cal. Rev. & Tax. Code § 19191 establishes the voluntary disclosure program and provides that the FTB will limit the imposition of tax to a six-year lookback period and may waive certain penalties for eligible business entities. Cal. Rev. & Tax. Code § 19192 provides that the FTB may extend the time for filing returns and paying amounts due to 120 days from the signing date of the voluntary disclosure agreement. Cal. Rev. & Tax. Code § 19193 provides that nothing in the article shall be construed to mean that the FTB abdicates its right to audit the taxpayer and assess any additional tax. Cal. Rev. & Tax. Code § 19194 addresses the qualified entity’s liability for taxes, and Cal. Rev. & Tax. Code § 19195 addresses the shareholder’s, member’s, or beneficiary’s liability.

New York Statutory Authority

N.Y. Tax Law § 1700 establishes the Voluntary Disclosure and Compliance Program, authorizing the Tax Department to waive civil and criminal penalties for eligible taxpayers who disclose and pay overdue taxes. The statute requires the Tax Department to establish procedures and administer the program, and requires eligible taxpayers to apply by submitting a disclosure statement in the form and manner prescribed by the commissioner. The lookback period for foreign bank account disclosures is a minimum of six years if the account was held for six years or more, or the number of years the account was held if less than six years.

Texas Statutory Authority

Tex. Tax Code § 111.009 provides that a Voluntary Disclosure Agreement (VDA) is available to taxpayers to report previously unpaid or underpaid taxes to the Comptroller’s office, with relief from penalties and, in most cases, from interest. To qualify, a taxpayer must not have been previously contacted by the Comptroller regarding the tax liability in question and must not be under audit or examination. The Comptroller prepares its own voluntary disclosure agreements for MVDP participants, and applicants must adhere to its procedures.

Florida Statutory Authority

Fla. Stat. § 213.21 authorizes the Florida Department of Revenue to administer the Voluntary Disclosure Program, covering all taxes the agency administers. The typical lookback period is three years for most taxes, and the lookback period includes the three years immediately preceding the postmark date of the VDA request. Most penalties are waived, but if the taxpayer collected tax and never remitted it, a reduced 5% penalty applies instead of a full waiver.

Illinois Statutory Authority

86 Ill. Admin. Code § 210.126 establishes the Illinois VDP, limiting the statute of limitations for the tax type on the application to four years and providing that there will be no imposition of civil fraud penalties based on information voluntarily disclosed on the application. The taxpayer must file Illinois tax returns for the tax being disclosed for the last four years and pay all tax and interest.

Pennsylvania Statutory Authority

72 Pa. Stat. § 9701 establishes the Pennsylvania VDP, limiting qualifying taxpayers’ liabilities to three years plus the current year for non-corporate taxes including sales and use tax, employer withholding tax, and personal income tax. All penalties for most taxes administered by the PA Department of Revenue will be waived when the requirements of the Voluntary Disclosure Agreement have been completed. Taxpayers under VDA cannot petition for a refund of any taxes reported through the program.

Summary Table of Authorities

State	Statute	Lookback Period	Penalty Waiver	Interest Waiver
California	Cal. Rev. & Tax. Code § 19191	6 years	Yes (certain penalties)	No
New York	N.Y. Tax Law § 1700	6+ years (foreign accounts)	Yes (civil and criminal)	No
Texas	Tex. Tax Code § 111.009	4 years (franchise tax)	Yes	Yes (most cases)
Florida	Fla. Stat. § 213.21	3 years	Yes (except 5% for collected/unremitted)	No
Illinois	86 Ill. Admin. Code § 210.126	4 years	Yes (all penalties)	No
Pennsylvania	72 Pa. Stat. § 9701	3 years + current	Yes (most taxes)	No
Multistate (MTC)	MTC MVDP Procedures	Varies by state	Yes (unless otherwise indicated)	Yes (prior to lookback)

Practical Application in Tax Practice

Direct answer: In practice, state voluntary disclosure programs require taxpayers to submit an application (often anonymously through an intermediary), negotiate the terms of the VDA, file returns and pay taxes and interest for the lookback period, and maintain compliance going forward. Each state applies different lookback periods, penalty waivers, and eligibility requirements.

Research

Direct answer: Researching California’s VDP requires consulting Cal. Rev. & Tax. Code § 19191–19193 and FTB Form 4925. Researching New York’s program requires N.Y. Tax Law § 1700 and the Tax Department’s Voluntary Disclosure and Compliance Program webpage. Texas research requires Tex. Tax Code § 111.009 and Publication 96-576. Florida research requires Fla. Stat. § 213.21 and the DOR’s Voluntary Disclosure Program webpage.

Start with the applicable voluntary disclosure statute for each state. For California, consult Cal. Rev. & Tax. Code § 19191–19193 and the FTB’s Voluntary Disclosure Program webpage. For New York, consult N.Y. Tax Law § 1700 and the Tax Department’s Voluntary Disclosure and Compliance Program webpage. For Texas, consult Tex. Tax Code § 111.009 and Publication 96-576. For Florida, consult Fla. Stat. § 213.21 and the DOR’s Voluntary Disclosure Program webpage. For Illinois, consult 86 Ill. Admin. Code § 210.126. For Pennsylvania, consult 72 Pa. Stat. § 9701. The MTC Multistate Voluntary Disclosure Program Procedures provide the governing framework for multistate disclosures.

Audit

Direct answer: A state voluntary disclosure audit typically arises when the taxpayer’s application is rejected or when the disclosed information is incomplete or inaccurate. The FTB retains the right to audit the taxpayer and assess additional tax under Cal. Rev. & Tax. Code § 19193. The PA Department of Revenue reserves the right to audit the taxpayer under the VDA.

The FTB retains the right to audit the taxpayer and assess additional tax if the voluntary disclosure is incomplete or inaccurate under Cal. Rev. & Tax. Code § 19193. The PA Department of Revenue reserves the right to audit the taxpayer under the VDA. The Texas Comptroller may reject applications if the taxpayer has been previously contacted regarding the tax liability or is under audit or examination. The MTC participating state has the discretion and ultimate authority to accept or reject a taxpayer’s application. Taxpayers who fail to comply with the terms of the VDA may face penalties in addition to interest.

Appeals

Direct answer: In California, a taxpayer may appeal an FTB determination to the Office of Tax Appeals under Cal. Rev. & Tax. Code § 15670. In New York, a taxpayer may file a petition with the Division of Tax Appeals under 20 NYCRR § 3000.3. In Texas, a taxpayer may request a redetermination hearing with the Comptroller. In Florida, a taxpayer may protest a DOR assessment and request an administrative hearing under Fla. Stat. § 72.011.

California‘s OTA appeal process begins with filing a Petition for Administrative Hearing within 30 days of the FTB’s Notice of Action under Cal. Rev. & Tax. Code § 15670. New York‘s DTA process begins with filing a Petition within 90 days of the Notice of Deficiency under 20 NYCRR § 3000.3. Texas taxpayers may request a redetermination hearing with the Comptroller under Tex. Tax Code § 111.009. Florida taxpayers may protest a DOR assessment and request an administrative hearing under Fla. Stat. § 72.011. Illinois taxpayers may appeal to the Board of Appeals under 86 Ill. Admin. Code § 210.126. Pennsylvania taxpayers may file an appeal with the Board of Appeals within 60 days of the assessment under 61 Pa. Code § 7.12.

Litigation

Direct answer: In California, OTA decisions may be appealed to the Superior Court and then to the Courts of Appeal under Cal. Rev. & Tax. Code § 15679. In New York, Tax Appeals Tribunal decisions may be reviewed by the Appellate Division under N.Y. Tax Law § 2016. In Texas, suits must be filed in district court. In Florida, taxpayers may file suit in circuit court under Fla. Stat. § 72.011.

California OTA decisions are subject to judicial review under Cal. Rev. & Tax. Code § 15679, with the Superior Court reviewing the administrative record. New York Tribunal decisions are reviewed by the Appellate Division under N.Y. Tax Law § 2016 and Article 78 of the CPLR. Texas franchise tax disputes are litigated in district court in Travis County or the taxpayer’s county of residence. Florida corporate income tax disputes may be filed in circuit court under Fla. Stat. § 72.011. Illinois Board of Appeals decisions may be appealed to the Circuit Court. Pennsylvania Board of Appeals decisions are subject to judicial review in the Court of Common Pleas and may be further appealed to the Commonwealth Court under 72 Pa. Stat. § 9186.

Planning Strategies

Direct answer: HNWIs considering voluntary disclosure should consider six primary planning strategies: (1) approaching the state anonymously through an intermediary before the state makes contact; (2) negotiating the lookback period and penalty waiver terms; (3) considering the MTC Multistate Voluntary Disclosure Program for liabilities in multiple states; (4) filing all required returns and paying taxes and interest within the agreed timeframe; (5) maintaining compliance going forward; and (6) documenting the voluntary nature of the disclosure.

Key planning strategies include: (1) Approach the state anonymously through an intermediary such as an accountant or attorney, as most states allow taxpayers to negotiate the terms of the VDA before revealing their identity. (2) Negotiate the lookback period and penalty waiver terms—most programs limit the lookback period to three or four years, although California and New York have six-year lookbacks for certain disclosures. (3) Consider the MTC Multistate Voluntary Disclosure Program for liabilities in multiple states, which allows taxpayers to resolve potential tax liabilities with multiple states simultaneously through a uniform procedure. (4) File all required returns and pay taxes and interest within the agreed timeframe—the FTB may extend the time for filing returns and paying amounts due to 120 days from the signing date of the VDA under Cal. Rev. & Tax. Code § 19192. (5) Maintain compliance going forward by filing all required returns and paying taxes on time in subsequent years. (6) Document the voluntary nature of the disclosure to support the penalty waiver and establish the taxpayer’s good faith.

Interaction with Other Authorities

Direct answer: State voluntary disclosure statutes control over inconsistent agency guidance and form instructions. Federal constitutional limits under the Due Process and Commerce Clauses constrain state taxing authority but do not preempt state voluntary disclosure rules that are rationally related to a legitimate state interest. The MTC Multistate Voluntary Disclosure Program operates under authority of the Multistate Tax Compact.

Higher Authority

Direct answer: The U.S. Constitution is the highest authority, followed by state constitutions and state revenue statutes. The Due Process Clause requires a minimum connection between the state and the taxpayer before the state may impose an income tax. The Commerce Clause prohibits state taxes that discriminate against or unduly burden interstate commerce.

Under the Due Process Clause, a state may tax an individual’s income only if the individual has sufficient minimum contacts with the state. The Commerce Clause prohibits state taxes that discriminate against interstate commerce or impose undue burdens on it. The Multistate Tax Compact provides the legal authority for the MTC’s Multistate Voluntary Disclosure Program, as upheld by the U.S. Supreme Court in U.S. Steel Corp. v. Multistate Tax Commission, 434 U.S. 452 (1978).

Lower Authority

Direct answer: State agency application forms, publications, and guidance documents are lower authority than state revenue statutes. The FTB Form 4925, New York Voluntary Disclosure application, and MTC Multistate Voluntary Disclosure Program Procedures provide procedural guidance but do not have the force of law.

FTB Form 4925 provides the application format for California’s VDP but is not binding on courts. The New York Voluntary Disclosure application provides procedural guidance but is not binding on courts. The MTC Multistate Voluntary Disclosure Program Procedures govern the multistate disclosure process but are not binding on state courts.

Conflict Resolution

Direct answer: When a state agency’s voluntary disclosure guidance conflicts with a state revenue statute, the statute controls. When a state agency’s interpretation conflicts with a court decision, the court decision controls. When federal constitutional requirements conflict with state voluntary disclosure rules, the constitutional requirement controls.

The resolution rule is that legislative enactments supersede administrative rules and guidance. Cal. Rev. & Tax. Code § 19191 controls over any inconsistent FTB guidance. N.Y. Tax Law § 1700 controls over any inconsistent NYS DTF publication. Tex. Tax Code § 111.009 controls over any inconsistent Comptroller rule. Fla. Stat. § 213.21 controls over any inconsistent FL DOR guidance. 86 Ill. Admin. Code § 210.126 controls over any inconsistent IL DOR guidance. 72 Pa. Stat. § 9701 controls over any inconsistent PA DOR guidance.

Sunset and Transition Rules

Direct answer: California’s VDP under Cal. Rev. & Tax. Code § 19191 has no scheduled sunset. New York’s program under N.Y. Tax Law § 1700 has no scheduled sunset. Texas’s program under Tex. Tax Code § 111.009 has no scheduled sunset. Florida’s program under Fla. Stat. § 213.21 has no scheduled sunset. Washington’s temporary programs are available through December 31, 2026, and September 30, 2027.

California‘s VDP has no scheduled sunset. New York‘s program has no scheduled sunset. Texas‘s program has no scheduled sunset. Florida‘s program has no scheduled sunset. Illinois‘s program has no scheduled sunset. Pennsylvania‘s program has no scheduled sunset. Washington‘s temporary programs are available through December 31, 2026, and September 30, 2027, with a permanent program codified for the B&O tax beginning July 1, 2027.

Common Errors and Pitfalls

Waiting too long to come forward. Voluntary disclosure eligibility generally hinges on the taxpayer voluntarily coming forward before the state makes contact. Once the taxpayer receives a nexus questionnaire or audit notice, eligibility may be lost.
Failing to approach anonymously through an intermediary. Most states allow taxpayers to negotiate the terms of the VDA before revealing their identity. Taxpayers who approach the state directly lose this protection.
Assuming penalties are always waived. Most programs waive penalties, but exceptions exist. Florida imposes a reduced 5% penalty for collected but unremitted sales tax. California’s FTB retains the right to audit the taxpayer and assess additional tax if the disclosure is incomplete or inaccurate.
Underestimating the lookback period. California and New York have six-year lookbacks for certain disclosures, longer than the typical three- to four-year lookback in other states .
Failing to file all required returns. Taxpayers must file all required returns and pay taxes and interest for the lookback period. The FTB may extend the time for filing to 120 days from the signing date of the VDA under Cal. Rev. & Tax. Code § 19192.
Ignoring the MTC Multistate Voluntary Disclosure Program. Taxpayers with liabilities in multiple states should consider the MTC program, which allows them to resolve potential tax liabilities with multiple states simultaneously through a uniform procedure.
Failing to maintain compliance going forward. Taxpayers must agree to comply with all tax laws in subsequent years and file all required returns. Failure to do so may result in penalties and interest.
Assuming the VDA prevents future audits. The FTB retains the right to audit the taxpayer and assess additional tax under Cal. Rev. & Tax. Code § 19193. The PA Department of Revenue reserves the right to audit the taxpayer under the VDA.

What This Article Does Not Cover

Federal voluntary disclosure. The IRS Voluntary Disclosure Practice under IRM 9.5.11.9 is separate from state voluntary disclosure programs. This article addresses only state programs.
Amnesty programs. Tax amnesty programs are offered broadly for a limited time and can include penalty and interest relief, unlike voluntary disclosure programs, which are available continuously.
Managed audits. Managed audits are designed for registered taxpayers to expedite the audit process and are not intended for taxpayers who have not complied with return filing requirements.
Criminal tax evasion. This article addresses civil voluntary disclosure, not criminal investigations.
Other states. This article focuses on California, New York, Texas, Florida, Illinois, Pennsylvania, and Washington. Other states with voluntary disclosure programs include Alabama, Arizona, Connecticut, Delaware, Georgia, and Maryland.

How to Verify This Article

Primary sources for verification:

California Franchise Tax Board: Cal. Rev. & Tax. Code § 19191–19193, FTB Form 4925, available at FTB.ca.gov.
New York State Department of Taxation and Finance: N.Y. Tax Law § 1700, Voluntary Disclosure and Compliance Program, available at tax.ny.gov.
Texas Comptroller of Public Accounts: Tex. Tax Code § 111.009, Publication 96-576, available at comptroller.texas.gov.
Florida Department of Revenue: Fla. Stat. § 213.21, Voluntary Disclosure Program, available at floridarevenue.com.
Illinois Department of Revenue: 86 Ill. Admin. Code § 210.126, Voluntary Disclosure Program, available at tax.illinois.gov.
Pennsylvania Department of Revenue: 72 Pa. Stat. § 9701, Voluntary Disclosure Program, available at revenue.pa.gov.
Multistate Tax Commission: Multistate Voluntary Disclosure Program Procedures, available at mtc.gov.
Cornell Legal Information Institute: State statutes and regulations available at law.cornell.edu.

Query Fan-Out Answer Map

Fan-Out Question	Answered In	Answer Unit (verbatim)
What is a state voluntary disclosure program?	H2: What Is a State Voluntary Disclosure Program?	A state voluntary disclosure program is a formal administrative process under which a taxpayer that has not filed required state tax returns comes forward voluntarily to disclose and pay past-due taxes in exchange for a limited lookback period, waiver of penalties, and in some states, protection from criminal prosecution.
Which states have voluntary disclosure programs?	H2: Introduction	California, New York, Texas, Florida, Illinois, Pennsylvania, and Washington each operate voluntary disclosure programs under distinct statutory and administrative frameworks.
What is California’s voluntary disclosure program?	H2: Key Authorities and Cases > H3: California Statutory Authority	Cal. Rev. & Tax. Code § 19191 establishes the voluntary disclosure program and provides that the FTB will limit the imposition of tax to a six-year lookback period and may waive certain penalties for eligible business entities.
What is New York’s voluntary disclosure program?	H2: Key Authorities and Cases > H3: New York Statutory Authority	N.Y. Tax Law § 1700 establishes the Voluntary Disclosure and Compliance Program, authorizing the Tax Department to waive civil and criminal penalties for eligible taxpayers who disclose and pay overdue taxes.
What is Texas’s voluntary disclosure program?	H2: Key Authorities and Cases > H3: Texas Statutory Authority	Tex. Tax Code § 111.009 provides that a Voluntary Disclosure Agreement is available to taxpayers to report previously unpaid or underpaid taxes to the Comptroller’s office, with relief from penalties and, in most cases, from interest.
What is Florida’s voluntary disclosure program?	H2: Key Authorities and Cases > H3: Florida Statutory Authority	Fla. Stat. § 213.21 authorizes the Florida Department of Revenue to administer the Voluntary Disclosure Program, covering all taxes the agency administers, with a typical three-year lookback period.
What is the lookback period for California’s VDP?	H2: Key Authorities and Cases > H3: California Statutory Authority	Cal. Rev. & Tax. Code § 19191 provides that the FTB will limit the imposition of tax to a six-year lookback period.
What is the lookback period for New York’s VDP?	H2: Key Authorities and Cases > H3: New York Statutory Authority	The lookback period for foreign bank account disclosures is a minimum of six years if the account was held for six years or more, or the number of years the account was held if less than six years.
How do I apply for a voluntary disclosure program?	H2: Practical Application in Tax Practice > H3: Research	Taxpayers must submit an application in the form and manner prescribed by the state taxing authority, often anonymously through an intermediary, and negotiate the terms of the VDA before revealing their identity.
What are the benefits of a voluntary disclosure agreement?	H2: Practical Application in Tax Practice > H3: Planning Strategies	Benefits include a limited lookback period, waiver of penalties, protection from criminal prosecution in some states, and the ability to negotiate the terms of the agreement before revealing the taxpayer’s identity.
Can I participate in voluntary disclosure if I’ve already been contacted by the state?	H2: Common Errors and Pitfalls	Voluntary disclosure eligibility generally hinges on the taxpayer voluntarily coming forward before the state makes contact. Once the taxpayer receives a nexus questionnaire or audit notice, eligibility may be lost.
What is the MTC Multistate Voluntary Disclosure Program?	H2: Introduction	The Multistate Tax Commission Multistate Voluntary Disclosure Program allows taxpayers to resolve liabilities with multiple states simultaneously through a uniform procedure, with each state determining its own lookback period.
How do I appeal a voluntary disclosure determination?	H2: Practical Application in Tax Practice > H3: Appeals	In California, a taxpayer may appeal an FTB determination to the Office of Tax Appeals within 30 days under Cal. Rev. & Tax. Code § 15670. In New York, a taxpayer may file a petition with the Division of Tax Appeals within 90 days under 20 NYCRR § 3000.3.
Did voluntary disclosure rules change after 2025?	H2: Interaction with Other Authorities > H3: Sunset and Transition Rules	Washington’s temporary programs are available through December 31, 2026, and September 30, 2027, with a permanent program codified for the B&O tax beginning July 1, 2027.
What records do I need for a voluntary disclosure?	H2: Practical Application in Tax Practice > H3: Research	Taxpayers must file all required returns and pay taxes and interest for the lookback period, and provide complete and accurate disclosure of all tax liabilities for the disclosed tax types.

Frequently Asked Questions

What is a state voluntary disclosure program?

Direct answer: A state voluntary disclosure program is a formal administrative process under which a taxpayer that has not filed required state tax returns comes forward voluntarily to disclose and pay past-due taxes in exchange for a limited lookback period, waiver of penalties, and in some states, protection from criminal prosecution. California, New York, Texas, Florida, Illinois, Pennsylvania, and Washington each operate voluntary disclosure programs under distinct statutory and administrative frameworks.

Which states have voluntary disclosure programs?

Direct answer: California, New York, Texas, Florida, Illinois, Pennsylvania, and Washington each operate voluntary disclosure programs. California’s program is statutory under Cal. Rev. & Tax. Code § 19191–19193, New York’s is under N.Y. Tax Law § 1700, Texas’s is under Tex. Tax Code § 111.009, Florida’s is under Fla. Stat. § 213.21, Illinois’s is under 86 Ill. Admin. Code § 210.126, Pennsylvania’s is under 72 Pa. Stat. § 9701, and Washington’s temporary programs are available through 2026 and 2027.

What is the lookback period for voluntary disclosure?

Direct answer: Lookback periods vary by state. California and New York have six-year lookbacks for certain disclosures. Texas has a four-year lookback for franchise tax. Florida has a three-year lookback for most taxes. Illinois limits the statute of limitations to four years. Pennsylvania limits liabilities to three years plus the current year. The MTC Multistate Voluntary Disclosure Program allows each participating state to determine its own lookback period.

How do I apply for a voluntary disclosure program?

Direct answer: Taxpayers must submit an application in the form and manner prescribed by the state taxing authority, often anonymously through an intermediary such as an accountant or attorney. The negotiation process typically begins with a draft proposal that includes a description of the taxpayer’s activities, the point at which nexus was established, proposed terms of the agreement, and an estimated schedule of taxes due. Once the terms are agreed upon, the taxpayer files returns and pays taxes and interest for the lookback period.

What are the benefits of a voluntary disclosure agreement?

Direct answer: Benefits include a limited lookback period, waiver of penalties, protection from criminal prosecution in some states, and the ability to negotiate the terms of the agreement before revealing the taxpayer’s identity. Most programs limit the lookback period to three or four years, although California and New York have six-year lookbacks for certain disclosures. Interest is usually assessed in full, and the state may retain the right to audit the taxpayer.

Can I participate in voluntary disclosure if I’ve already been contacted by the state?

Direct answer: Voluntary disclosure eligibility generally hinges on the taxpayer voluntarily coming forward before the state makes contact. Once the taxpayer receives a nexus questionnaire or audit notice, eligibility may be lost. The MTC Multistate Voluntary Disclosure Program provides that a taxpayer who has had prior contact with a participating state concerning a tax type is ineligible to participate with respect to that state and tax type. However, in several states, even receiving a nexus questionnaire does not automatically disqualify a taxpayer from participating in a VDA.

Conclusion

State voluntary disclosure programs provide high-net-worth individuals with a structured pathway to resolve past-due state tax liabilities on favorable terms. California’s VDP under Cal. Rev. & Tax. Code § 19191–19193, New York’s program under N.Y. Tax Law § 1700, Texas’s program under Tex. Tax Code § 111.009, Florida’s program under Fla. Stat. § 213.21, Illinois’s program under 86 Ill. Admin. Code § 210.126, Pennsylvania’s program under 72 Pa. Stat. § 9701, and Washington’s temporary programs each offer different lookback periods, penalty waivers, and eligibility requirements. The Multistate Tax Commission Multistate Voluntary Disclosure Program allows taxpayers to resolve liabilities with multiple states simultaneously through a uniform procedure. Successful navigation requires approaching the state anonymously through an intermediary before the state makes contact, negotiating favorable terms, filing all required returns, and maintaining compliance going forward. HNWIs with past-due state tax liabilities should evaluate voluntary disclosure as a proactive resolution strategy before the state initiates an audit or investigation.

Author Bio

Alan Goldstein is an Enrolled Agent and researcher with 26 years of experience in federal and state tax controversy. He advises high-net-worth families and closely held businesses on income-shifting strategies, charitable planning, and IRS audit defense.

Author sameAs: [LinkedIn URL], [Professional Profile URL], [Published Works URL]

Last Updated: October 5, 2026

Next Scheduled Review: October 2027

THIS ARTICLE IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL ADVICE. THE INFORMATION MAY BE OUTDATED AND YOU ARE NOT TO RELY ON IT. CONTACT YOUR PROFESSIONAL TO GUIDE YOU BASED ON YOUR CURRENT SITUATION, OR WHAT MAY APPLY TO PREVIOUS YEARS. THIS ARTICLE IS ONLY MEANT TO PROVIDE GENERAL INFORMATION AND NOT A SPECIFIC ANSWER. YOU ARE NOT OUR CLIENT AND WE HAVE NOT ADVISED YOU.

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