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Voluntary Disclosure for Sales Suppression: Coming Forward Before You’re Contacted

If your business has underreported sales tax — whether through automated sales suppression software or otherwise — you may have a narrow, time-sensitive opportunity to resolve it on far better terms than waiting to be caught. Most states run a voluntary disclosure program, and the difference between coming forward and being found is often the difference between a civil settlement and a criminal referral.

How Voluntary Disclosure Can Change Your Exposure

A voluntary disclosure agreement (VDA) is a negotiated resolution between a taxpayer and a state revenue department. Depending on the state and the facts, a properly structured disclosure can limit the number of years the state reaches back, reduce or eliminate certain penalties, and — critically — move a matter that could have been handled criminally into a civil track. These are not automatic outcomes; they depend on the state, the conduct, and how the disclosure is presented.

Timing Is Everything: Before the State Contacts You

Voluntary disclosure programs generally require that you come forward before the state has contacted you about the liability. Once you receive an audit notice, a subpoena, or an inquiry about your point-of-sale system, the voluntary-disclosure door usually begins to close. This is the single most important thing to understand: the value of a disclosure erodes with every day you wait.

Voluntary Disclosure in Pennsylvania and New Jersey

Both Pennsylvania and New Jersey operate voluntary disclosure programs, and both have criminal sales-suppression statutes on the books (see our 50-state zapper law table). The interplay between a state’s VDA program and its zapper statute is exactly the kind of thing that should be evaluated before you say anything to anyone.

Why This Should Not Be Done Alone

A voluntary disclosure is a legal negotiation in which what you say, and how you say it, matters. Approaching a revenue department without counsel — or worse, after an auditor has already called — can forfeit the very protections the program is designed to offer. If you are weighing whether to come forward, that decision should be made with an advisor who does this work.

This page is general information, not legal advice, and does not create an attorney–client relationship. See our full disclaimer.