A Voluntary Disclosure Agreement (VDA) is a contractual arrangement between your business and a state tax authority where you voluntarily reveal past tax liabilities in exchange for concessions. These typically include reduced look-back periods (usually 3-4 years instead of the full statutory period) and waived penalties.

Most states permit anonymous applications through a tax professional. This approach allows you to come into compliance proactively before states contact you, potentially saving significant money on penalties and interest while limiting your exposure to back taxes.