State Offshore Voluntary Disclosure and Amnesty Programs


As an Intake Specialist at IRSMedic, I am one of the first people our clients from all around the globe speak with. Clients that, for whatever reason, have neglected to report income on their federal tax returns. These taxpayers hire our firm to deal with the many intricacies of whatever federal tax amnesty program our legal team thinks is most appropriate for them.


Adding to the complexity is that typically if there is unreported income on a federal tax return, there will be a change to a client's state income tax return as well. Assuming, of course, that they are US-based and live in a state with an income tax.


The problem is that offshore disclosure initiatives vary significantly state-by-state. Some states, like Alaska, have no state income tax, thus there is no need for an OVDP-type program. And other states like Florida that have no personal income tax, yet still have a voluntary disclosure program for business entities. Other state offshore amnesty programs once existed but have since lapsed. Some states have created new programs. 


This all adds much confusion to an already confusing situation, especially for those who are not natural-born US citizens and are unfamiliar with parallel state taxing regimes, such as  Chinese nationals as Julia wrote about in an earlier article.


To help sort this all out, the following is the guide we created by making calls and investigating state revenue department websites to help us determine what type of state Offshore Voluntary Disclosure Programs our clients who are based in the US should use.


Note: Information changes all the time, so use this guide at your own risk. A legal opinion, for which this is not a substitute for, is always recommended. I will be updating as there are still a few states I am waiting to hear back from or are about to announce disclosure programs. Also, some states are quite vague if a program exists or limits to programs usage to unique facts. In that case, legal advice is again, highly recommended.


US State OVDP-Type Voluntary Disclosure Program? URL for Voluntary Disclosure Program Amended Returns Required: Years? State DOR Website Notes:  
AL No     Alabama DOR  Awaiting response  
AK N/A N/A N/A Alaska DOR No Individual Income Tax  
AZ Yes AZ Voluntary Disclosure Domestic only Arizona DOR Qualifications are very superficial. We have received limited information from the state to determine if our clients would be well served to go under VD program.  
AR No   All OVDP years Arkansas DOR Amended AK tax return due within 90 days of federal change.  
CA No   All OVDP years California DOR State specifically directs that we should only submit amended returns for all years included in OVDP. Amended returns due within 6 months of federal changes.  
CO No   All OVDP years Colorado DOR    
CT Yes CT Voluntary Disclosure CT VD will mirror federal OVDP. Connecticut DOR  Unsure look back is 6 or 8 years for standard.  
DE No   All OVDP years Delaware DOR program valid for and closed in 2009 only  
FL Yes FL Voluntary Disclosure 3 years Florida DOR No Individual Income Tax, but can apply for business entities with foreign holdings  
GA Yes GA Voluntary Disclosure VDA response will set look-back period Georgia DOR Must file application  
HI No   All OVDP years Hawaii DOR Amended HI tax return due within 90 days of federal change.  
ID No   All OVDP years Idaho DOR Amended ID tax return due within 60 days of federal change.  
IL No N/A All OVDP years Illinois DOR Voluntary Disclosure for non-filers only. Amended IL return due within 120 days of federal change becoming final.  
IN Sort of IN Voluntary Disclosure   Indiana DOR Disqualified from voluntary disclosure if living in state.  
IA Sort of IA Voluntary Disclosure   Iowa DOR Non Specific  
KS Yes KS Voluntary Disclosure 3 year look back period Kansas DOR Non Specific  
KY Sort of KY Voluntary Disclosure   Kentucky DOR Program Description is very superficial  
LA Sort of   Past 3 years only Louisiana DOR Unfortunately taxpayers who are already registered with us and filing returns are not eligible to enter into a voluntary disclosure agreement for that tax. Their only alternative is to amend their returns and pay any additional taxes due plus interest and request a waiver of any penalty due. The amended returns, payment, and waiver request should be submitted to our Office Audit Division.  
ME No     Maine DOR Amended ME tax return due within 180 days of federal change.  
MD Yes MD Voluntary Disclosure   Maryland DOR Non Specific  
MA No     Massachusettes DOR Voluntary Disclosure for non-filers only  
MI No     Michigan DOR Voluntary Disclosure for non-filers only  
MN Unclear MN Voluntary Disclosure Same # of yrs would apply for both OVDP and Streamlined, as long as there's a state filing requirement Minnesota DOR Non Specific  
MS Unclear MS Voluntary Disclosure   Mississippi DOR Non Specific  
MO No     Missouri DOR Voluntary Disclosure for non-filers only  
MT Yes MT Voluntary Disclosure Have to report the foreign assest(s) on both state and federal return; did not specify the look back period Montana DOR Specifically addresses Foreign Accounts  
NE No     Nebraska DOR Voluntary Disclosure for non-filers only  
NV No     Nevada DOR Voluntary Disclosure for non-filers only  
NH Yes NH Voluntary Disclosure 3-year look back period New Hampshire DOR Non Specific. New Hampshire does have income tax on unearned income, like foreign investment earnings  
NJ Yes NJ Voluntary Disclosure Unfiled participants will have a look back period of the years unfiled with the state only, and may get penalties waived depending on the years; does not apply to taxpayers amended returns. See also OVCI New Jersey DOR Non Specific  
NM They did, unclear if still avail NM Voluntary Disclosure OVCI; Will need to amend state return to reflect offshore accounts New Mexico DOR Program was active in 2003. Could not find any recent info suggesting that it is still available.  
NY Yes NY Voluntary Disclosure look-back period will be equal to the tax years that were required to be filed with the IRS New York DOR Specifically addresses Foreign Accounts  
NC Yes NC Voluntary Disclosure The participant would need to complete the program (OVDP or Streamlined), then amend the state return for the same years. North Carolina DOR Tricky Qualifications. Suspect only SDOP, STOP and Opt-Out would qualify  
ND No     North Dakota DOR Business Compliance Program Only  
OH Sort of Ohio Disclosure Program   Ohio DOR Program pertains to "those who believe they have a liability". Does not specify qualifications or disqualifications.  
OK No     Oklahoma DOR Voluntary Disclosure for non-filers only  
OR No     Oregon DOR Business Compliance Program Only  
PA Sort of PA Voluntary Disclosure N/A (state only) Pennsylvania DOR Disclosure program applies to "those who have recently become aware" which may alleviate penalties from OVDP, but is not specific to the program  
RI No     Rhode Island DOR Could not find any Disclosure program  
SC No     South Carolina DOR Could not find any Disclosure program  
SD No     South Dakota DOR No Personal Income Tax  
TN No     Tennessee DOR Business Compliance Program Only  
TX No     Texas DOR Business Compliance Program Only  
UT No     UTAH DOR Business Compliance Program Only  
VT No     Vermont DOR Business Compliance Program Only  
VA No     Virgina DOR Voluntary Disclosure for non-filers only  
WA N/A N/A N/A Washington DOR No individual or corporate income tax.  
WV No     http://www.wva.state.wv.us/wvtax/personalincometaxes.aspx None  
WI No     Wisconsin DOR Voluntary Disclosure for non-filers only  
WY N/A N/A N/A Wyoming DOR No Personal Income Tax