For Ohio business owners accidentally or intentionally overdue on their employee withholding, Ohio offers a voluntary disclosure program to facilitate transition back into compliance.
Across the country, legislated taxes fund federal and state programs, services, and benefits. We recently talked about tax disclosure programs available in Ohio to help business owners and individual taxpayers voluntarily account for past-due payments and move forward without the shadow of an Ohio criminal tax investigation or allegations of tax fraud.
Eligibility for any of the Ohio tax disclosure programs is not guaranteed. For the Employer and School District Withholding Tax Voluntary Disclosure program, qualification for the initiative includes these factors:
- If the Ohio Department of Taxation has previously contacted you, or your business, about employee withholding or school district taxes, the disclosure program is not available. This and the other Ohio disclosure programs require proactive effort by business owners to identify their liability and pursue the remedy before enforcement efforts are undertaken by the State.
- Similarly, if the State has already issued you an assessment on outstanding employer withholding or school district taxes, the disclosure program is not available.
- To be eligible for a Voluntary Disclosure Agreement (VDA), the business owner must not be aware of any investigation by the Audit or Criminal Investigation divisions of the Ohio Department of taxation. The disclosure program covers businesses that have not filed withholding or school district taxes for any year during the period between 2017 and 2020.
If you are eligible for the program, successful completion of a VDA in Ohio requires the following:
- Completion and submission of the Voluntary Disclosure Agreement.
- Filing of all annual withholding returns and disclosure of amounts collected but not remitted during the 2017 to 2020 disclosure period.
- If school district taxes are also in arrears, separate payment of these taxes is required—regardless of whether the arrears fall outside of the 2017 to 2020 program period.
- A VDA does not excuse interest or penalties on the late payments. In exchange for not pursing a business owner for a tax crime like failure to file a tax return, a VDA requires voluntary payment of interest on the amount due as well as a 10 percent penalty on taxes collected but not remitted to the agency.
The financial pain of interest and penalties on any past-due sum is real, but doesn’t compare with the roller coaster ride of a criminal tax audit and the personal consequences of conviction. When you have questions about a payroll tax issue, or potential tax litigation, speak with an experienced tax attorney in Ohio.
Worried about tax compliance? Our tax lawyers can help
With offices in Cleveland and Chicago, the legal team at Robert J. Fedor, Esq., LLC offers help with tax controversy, Trust Fund recovery, and guidance with criminal and civil tax audits. Contact us today or call 800-579-0997.
