Hiring an adviser for multistate voluntary disclosure: define the work first

When a business discovers possible unfiled state taxes, ask an adviser to assess the relevant states, taxes, and periods before quoting a package of voluntary disclosure applications. The first assignment should establish what happened and which resolution routes are available. A promise to obtain the same relief everywhere is not a useful substitute for that assessment.

The Multistate Tax Commission coordinates a voluntary disclosure process for participating states. Its guidance describes tax types generally covered and requires eligibility to be assessed for the relevant obligation. State participation and the company's history affect the route. Ask the adviser to identify work that must be handled directly with a state or through another process.

Collect prior registrations, filed returns, payments, notices, questionnaires, audit correspondence, and conversations with agencies. Include records held by former accountants or payroll providers. Mark what has been confirmed and what is still missing. The adviser should not be asked to assess eligibility from the statement that the current team has never filed there.

MTC explains that prior contact about a tax type can disqualify a taxpayer from its voluntary disclosure process for that tax type. Its examples include filing, paying, or receiving an inquiry. Tell the adviser about an agency letter promptly, including its response deadline. Preserve the letter and obtain advice on the required response while the available options are reviewed.

Do not omit inconvenient facts from an application or assume an old notice is irrelevant because it used a different company address. Ask the professional to assess its effect. Keep the history by legal entity so contact involving one company is not casually attributed to every affiliate or overlooked entirely.

Provide the activity timeline, sales by destination and channel, employee locations, inventory locations, and prior accounting records relevant to the tax under review. Identify when the data becomes incomplete. Ask the adviser which additional facts are needed to assess nexus, taxability, sourcing, and the period of potential exposure.

Request an estimate that separates tax, interest, penalties under the ordinary rules, and potential relief under the proposed route. State the assumptions and data limits beside the figures. A single savings number gives management no way to see whether the estimate excludes a tax type or assumes supporting certificates that have not been found.

Have the accountant reconcile the underlying sales or income population to the books. Resolve duplicate exports and unexplained omissions before the estimate becomes a factual representation to an agency. Keep a version of the calculation that can be reproduced after the engagement, with changes recorded when better evidence becomes available.

Ask the adviser to explain the proposed tax types, periods, factual representations, filing obligations, and payment requirements. Identify any condition the company cannot yet meet. A draft agreement needs management review before approval, including the cash needed to complete the required filings and payments.

MTC's overview explains that relief and the lookback period are governed by the agreement, with interest generally due unless the state expressly waives it. Do not budget as though every charge will disappear. Ask how the terms apply if the calculation changes, a fact proves inaccurate, or additional periods remain outside the agreement.

Request a scope that names who prepares the applications, responds to questions, reviews agreement terms, registers accounts where required, prepares returns, and verifies payments. Ask who handles a later agency calculation or notice. Some engagements may end before every operational task is finished, so the handoff needs to be explicit.

Also identify responsibility for current filings during the historical review. A project covering past exposure should have a plan for new transactions and newly due returns. Agree how the adviser will communicate required setup changes to the bookkeeper and sales-tax system owner, with approvals for any change to customer tax collection.

Keep the signed agreements, submitted applications, calculation files, returns, payment confirmations, and agency correspondence under the relevant entity and state. Ask for a written list of matters resolved, excluded periods, and unresolved items. Where a payment or filing remains in progress, retain its owner and next action.

Add the resulting accounts and obligations to the regular compliance calendar. Verify who receives notices and who maintains the data used for future returns. Before closing the adviser's engagement, test whether the internal team can retrieve the agreement and explain how its requirements were completed. Outstanding terms should remain tracked until their completion can be demonstrated.