42.2.310    VOLUNTARY DISCLOSURE PROGRAM FOR NONFILING TAXPAYERS

(1) The voluntary disclosure program allows qualified entities and individuals, and qualified shareholders, and partners of qualified pass-through entities to disclose their tax liabilities voluntarily and settle their tax obligations in a voluntary disclosure agreement. Affected taxpayers may contact the department directly as provided for in (3) or use the services of the Multistate Tax Commission's National Nexus Program. The department encourages those qualified entities, qualified shareholders, and qualified partners with a need to come into compliance with multiple states or other jurisdictions to use the services of the National Nexus Program to resolve their compliance issues. The National Nexus Program provides a single point of contact and substantially uniform procedures. Information regarding the National Nexus Program can be found at www.mtc.gov.

(a) If a taxpayer contacts the department directly, the department will not enter into a voluntary disclosure agreement on terms more favorable than the terms the taxpayer would have entered into through the services of the National Nexus Program.

(2) To qualify for a voluntary disclosure agreement with the department, a qualified entity, qualified shareholder, qualified partner, or qualified individual must meet all of the following criteria:

(a) have not filed a return for the tax type covered by the agreement within the last five years;

(b) have had no previous contact by the department or its agencies, including the Multistate Tax Commission, regarding a tax covered by the agreement, including but not limited to, notification of audit, review, assessment, request for information, letter from the department following a foreign company's registration with the Montana Secretary of State, or a letter from the department following a domestic company's formation by filing documents with the Montana Secretary of State;

(c) voluntarily come forward and make an application for a voluntary disclosure agreement that contains the information required by (3);

(d) agree to file returns specified in the agreement and pay all the taxes and statutory interest for the entire lookback period within the time period and manner specified in the agreement without further action by the department;

(e) agree to register with the Secretary of State (if a business entity), file returns, and pay all taxes for periods after the lookback period without further action by the department; and

(f) have not been a party to any criminal investigation or pending civil or criminal litigation for nonpayment, delinquency, or fraud in relation to any tax due.

(3) To request a voluntary disclosure agreement, a qualified entity, qualified shareholder, qualified partner and/or representatives or qualified individual must submit a written request to the department including the following information:

(a) if an entity:

(i) a full and accurate statement of the entity's activities for five immediately preceding filing periods;

(ii) a full and accurate statement of the entity's activities in Montana for five immediately preceding filing periods; and

(iii) the number of years the entity has been doing business in Montana;

(b) if an individual:

(i) a full and accurate statement of the individual's activities in Montana for five immediately preceding filing periods;

(ii) the addresses at which the individual has resided for the five immediately preceding filing periods; and

(iii) the number of years the individual maintained a place of abode in Montana;

(c) the type of tax or taxes for which they are requesting voluntary disclosure;

(d) an explanation for the failure to register with the Secretary of State, if an entity;

(e) an explanation of the failure to file Montana returns and pay taxes;

(f) proposed voluntary disclosure agreement terms; and

(g) an estimate of the tax liability for the lookback period.

(4) A qualified entity or individual may preserve confidentiality by not revealing its name or any information that could readily identify the company or individual during the voluntary disclosure process until the agreement is finalized.

(5) The voluntary disclosure agreement is voidable by the department if the qualified entity, shareholder, partner, or individual:

(a) misrepresents material facts relevant to the agreement;

(b) fails to file returns or pay taxes and statutory interest for the lookback period within the time specified in the agreement;

(c) reneges on an installment payment arrangement; or

(d) fails to continue to comply with Montana tax law.

History: 15-1-201, 15-30-2620 , 15-31-501, MCA; IMP, 15-1-206, 15-30-2101 , 15-30-2602, 15-31-101, 15-31-111, MCA; NEW, 2008 MAR p. 340, Eff. 2/15/08; AMD, 2014 MAR p. 1527, Eff. 7/11/14.