Navigate Up
Sign In
Last Updated: 2/10/2017

Minnesota Voluntary Disclosure Program

The Minnesota Department of Revenue’s Voluntary Disclosure Program is designed to help businesses come into compliance with Minnesota tax laws.  If your business has substantial nexus in Minnesota, we encourage you to have a representative contact us to work out a voluntary disclosure agreement. 

Benefits of Voluntary Disclosure

  • Achieve compliance with Minnesota tax laws
  • Possible waiver of some or all penalties
  • Limit the look-back period.  For sales and use, withholding, and MinnesotaCare taxes, the look back-period is generally three years.  For corporate franchise tax, S corporation tax, and partnership tax, the look-back period is generally four years (3 look-back years and 1 current year that is ready and available to be filed).
  • Eliminate the risk of being discovered under audit.  If you do not come forward through a voluntary disclosure agreement, and we contact you through a nexus investigation, there is no limit to the number of look-back years.
  • Remain anonymous during the review process

Taxpayer Qualifications

  • Not registered, or are willing to register for the specific tax type account
  • No contact by the Minnesota Department of Revenue regarding compliance or audit (ex. request to complete a nexus questionnaire)  
  • Not engaged in evasion or misrepresentation in reporting tax liabilities
  • Not currently under review for Minnesota tax obligations by the Minnesota Department of Revenue or other state agencies

Alternative Compliance Program

If you do not qualify for a formal Voluntary Disclosure agreement, we may be able to offer you some of the same incentives in return for voluntarily coming forward to resolve your tax issues.

Taxpayer Responsibilities

  • File all returns or spreadsheets specified in the agreement
  • File subsequent returns in a timely manner as specified in the agreement
  • Pay the tax due plus any penalty and accrued interest specified in the agreement
  • Make books and records available to the department

Department Rights

  • Audit the taxpayer and any returns filed
  • Void the agreement if factual misrepresentations have been made
  • Void the agreement if the taxpayer does not comply with any terms of the agreement

Confidentiality

The Minnesota Department of Revenue will keep the agreement, its terms and conditions confidential.  The only exception is when disclosure is required under exchange of information agreements with other government agencies or tax authorities.

How To Apply

To apply for the program, you must do so in writing.  List the tax types that you are applying for and include the information below for each of those tax types.

If you have a liability in more than one state you may consider applying for a multi-state voluntary disclosure through the Multistate Tax Commission.  For more information, see Multi-State Voluntary Disclosure on the MTC website.

Corporate Franchise Tax, S Corporation Tax, and Partnership Tax:

In your request letter, you must include the following:

  • Description of the Minnesota activities that exceeded Public Law 86-272 for the years involved
  • Date taxable activities began in Minnesota
  • Statement that the taxpayer is not currently under review by the Minnesota Department of Revenue for tax obligations
  • Statement that the taxpayer has not been contacted by the Minnesota Department of Revenue regarding compliance or audit of income/franchise tax
  • Statement of how the taxpayer files their federal income tax
  • Taxpayer’s taxable year-end
  • Approximate liability by year for the last 4 years (3 look-back years and 1 current year that is ready and available to be filed)
  • Contact information for you or your representative, including an email address

For more information, please contact us:

Corporate Franchise Tax:

Minnesota Department of Revenue
Attn: Cassie Diemert
Corporate Franchise Tax-NEFS
8 Pine Tree Drive Suite 300
Arden Hills, MN 55112

Phone: 651-556-5712
Email: cassondra.diemert@state.mn.us

S Corporation/Partnership Tax:

Minnesota Department of Revenue
Attn: Shannon Nelson
230 1st St S, Suite 102
Virginia, MN 55792

Phone: 218-735-3145
Email: shannon.l.nelson@state.mn.us

Sales and Use Tax:

In your request letter, you must include the following:

  • Description of why you owe sales or use tax, your taxable sales or purchase and when they began or occurred.  In addition, indicate if you:
    • Own or lease property in Minnesota
    • Have employees or independent sales representatives soliciting sales in the state
    • Have inventory in the state
    • Make deliveries into the state and (if so) how deliveries are transported
    • Engage third parties to install or repair property sold to Minnesota customers
  • Statement that the taxpayer in not currently under review by the Minnesota Department of Revenue for tax obligations
  • Statement that the taxpayer in not under audit by the Minnesota Department of Revenue or the Multistate Tax Commission’s National Nexus Program for sales or use tax activities.  You are not eligible for this program if you are under audit.
  • Statement that indicates why your failure to file is not the result of fraud or gross negligence.  We may still negotiate a settlement in cases of fraud or negligence, but the terms will be more rigorous.
  • Estimate of your tax liability for the periods when you had taxable sales or purchases
  • Statement as to whether or not you collected Minnesota sales taxes during those periods
  • Contact information for you or your representative, including an email address

For more information, please contact us:

Minnesota Department of Revenue
Attn: Brian Wittner
Mail Station 9901
600 North Robert Street
St. Paul, MN 55146

Phone: 651-556-6904
Email: vda.st@state.mn.us

Withholding Tax:

In your request letter, you must include the following:

  • Statement that you have not been contacted by the Minnesota Department of Revenue regarding compliance or audit of withholding tax
  • The state in which your business is located or headquartered
  • The number of workers whose withholding was underreported or not reported and whether Form W-2 or 1099 was issued to report the correct amount of compensation and Minnesota tax withheld
  • Explanation as to why there is a filing obligation or an underreported tax liability and the reason the filing obligation was not previously fulfilled or the tax not determined properly
  • Estimate of the liability for each year you failed to file or underreport withholding tax
  • Statement indicating whether you collected the Minnesota Withholding Tax from the workers
  • Contact information for you or your representative, including an email address

For more information, please contact us:

Voluntary Compliance Program
Attn: Andrew Rinderknecht
Minnesota Department of Revenue
Mail Station 5410
St. Paul, MN 55146-5410

Phone: 651-556-6963 (Metro) (TYY users call 711 for Minnesota Relay).
Email: Andrew.Rinderknecht@state.mn.us

MinnesotaCare:

In your request letter, you must include the following:

Providers, Hospital and Surgical Centers

  • Description of the patient services you provided in Minnesota
  • Estimate of your tax liability for the previous three tax years
  • Statement that you are not now – and never have been – registered for Minnesota Care Tax
  • Statement that you have not charged the MinnesotaCare Tax on your billing invoices
  • Statement that you are not currently under review by the Minnesota Department of Revenue for MinnesotaCare Tax obligations
  • Statement that indicates why your failure to file is not the result of fraud or gross negligence.  We may still negotiate a settlement in cases of fraud or negligence, but the terms will be more rigorous.

Wholesale Drug Distributors

  • Description of your business activities in Minnesota and when they began.  In addition, indicate if you do any of the following:
    • Own of lease property in the state
    • Have employees or independent sales representatives soliciting sales in the state
    • Have inventory located in the state
    • Make deliveries into the state and if so, the means of transportation used
    • Conduct training in the state
  • Estimate of your tax liability for the previous three tax years
  • Statement that you are not now – and never have been – registered for MinnesotaCare Tax
  • Statement that you have not charged the MinnesotaCare Tax on your billing invoices
  • Statement that you are not currently under review by the Minnesota Department of Revenue for MinnesotCare Tax obligations or nexus activities
  • Statement that indicates why your failure to file is not the result of fraud or gross negligence.  We may still negotiate a settlement in cases of fraud or negligence, but the terms will be more rigorous.

For more information, please contact us:

Voluntary Compliance Program
MinnesotaCare Tax Unit
Mail Station 6100
St. Paul, MN 55146-6100

Phone: 651-282-5533
Fax: 651-556-5233
Email: minnesotacare.tax@state.mn.us