U.S. flag An official website of the United States government.

Dot gov

The .gov means it's official.
Federal government websites always use a .gov or .mil domain. Before sharing sensitive information online, make sure you’re on a .gov or .mil site by inspecting your browser's address (or "location") bar.


This site is also protected by an SSL (Secure Sockets Layer) certificate that's been signed by the U.S. government. The https:// means all transmitted data is encrypted  — in other words, any information or browsing history that you provide is transmitted securely.

Voluntary Disclosure Program Guidelines

Taxes Eligible for a Voluntary Disclosure Agreement

The Department will enter into an Agreement for the following tax types:

  • Corporate Income Tax
  • Pass-Through Entity Income Tax
  • Financial Institution Excise Tax
  • Business Privilege Tax
  • State Sales & Use Tax*
  • State Administered Local Sales & Use Tax**
  • Rental or Leasing Tax
  • Transient Occupancy Tax (Lodgings Tax)
  • Utility Gross Receipts Tax
  • Mobile Telecommunications Service Tax
  • Pharmaceutical Providers Tax
  • Withholding Tax

*Please note that the Department does not enter into Voluntary Disclosure Agreements for Sales & Use Tax with no tax liability.

**A State Voluntary Disclosure Agreement does not apply to non-state administered localities in Alabama. The taxpayer must directly contact each non-state administered locality in which it has nexus to negotiate separate Voluntary Disclosure treatment.

  • Simplified Sellers Use Tax (SSUT) is not an eligible tax type for Voluntary Disclosure. If you are a remote seller with no physical presence (location, salespeople, installers, etc.) in Alabama, please review the SSUT section of our website here, and contact the Sales & Use Tax Division with any questions.
  • The Department does not enter into Agreements for Individual Income Tax liabilities. However, if an individual taxpayer is a nonresident shareholder/partner of a pass-through entity entering into a Voluntary Disclosure Agreement, such entity will file composite returns on the individual’s behalf.
  • In general, this Program is not open to taxpayers who have at sometime filed returns and/or qualified to do business and have fallen behind in their filing responsibilities within seven years prior to the submission date of the application.
  • The Department agrees to waive late file and late payment penalties and the taxpayer will be billed directly for interest***

***Code Section 40-18-80.1 provides a fee for the underpayment of estimated tax in an amount determined by applying the underpayment rate established by U.S.C. §6621. Since this is technically an interest charge and not a true penalty, taxpayers who have filed Income Tax returns under the terms of a Voluntary Disclosure Agreement will not receive a waiver of this estimate interest.

Nexus Determination

Nexus determinations will not be made through the Voluntary Disclosure Program. Therefore, taxpayers must have their nexus position in place before the application is submitted online. If the taxpayer is not engaging the services of a professional tax representative, or the taxpayer representative requires additional guidance, please complete Alabama’s Nexus Questionnaire. In this case, the taxpayer should indicate they are a “Potential Voluntary Disclosure Applicant” on the nexus questionnaire.

In the event that nexus was arguable or if there is no evidence that nexus existed during the three-year look-back period the representative may proceed through the normal registration process. However, the burden of proof is on the taxpayer.

Responsibility of the Taxpayer

To participate in the Voluntary Disclosure Program, the taxpayer must:

  • Enter into a binding Agreement with the Department for at least a three-year look-back period.
  • File all returns and forms for the period(s) specified in the Agreement within 90 days of the Department’s Signature Date of the Agreement.
  • Make current extension and/or estimate payments with the Voluntary Disclosure returns, if applicable, in order to receive a waiver of penalties.
  • Remit all tax and interest due as agreed upon.

 Three-Year Look-Back Period

The Voluntary Disclosure Program has a mandatory three-year look-back period.

The three-year look-back period is calculated by determining the last three tax years (or 36 months) which are past due as of the date the Application is submitted online. For example, Corporate Income Tax returns are generally due three-and-one-half months after the tax year end. If the Department receives an Application online in July 2019 for Corporate Income Tax on behalf of a company that has a fiscal year end of May 31, 2019, the look-back period would not include the tax year ending May 31, 2019 since this return is not due until September 2019. In this case, the look-back period would include tax years ending May 31, 2016 – May 31, 2018.

If the taxpayer has collected, but not remitted, Sales or Use Tax. Rental Tax, Lodgings Tax, Mobile Telecommunications Service Tax and/or Withholding Tax, the look-back period will be extended to include all periods in which tax was collected and not remitted, if applicable.

The effective date of the Agreement is established as the date the Application is submitted online.


The taxpayer may be disqualified and the Agreement rendered null and void if any one of the following is found:

  • Previous contact of any kind by the Department or an agent of the Department within seven years prior to the submission of the Application online. This includes returns filed for the tax types included in the Agreement for tax periods beginning before the look-back period. A contact includes, but is not limited to, with regard to potential liability for the type of tax identified in the Agreement: a request to complete a nexus questionnaire, a telephone call, an audit or notice of audit, payment of tax, registration for tax, registration with the Secretary of State, an extension payment, an estimated tax payment, or the filing of a return.
  • NOTE: If a taxpayer is considering, or in the process of, entering Alabama’s Voluntary Disclosure Program, no contact or filing of any kind should be initiated, e.g. registering with the Secretary of State or filing an extension, until the Application has been submitted online.
  • The taxpayer is currently under audit by the Department or an agent of the Department.
  • Misrepresentation of any facts set forth in the Application.
  • Failure by the taxpayer to comply with the terms of the Agreement.


The negotiation, execution and terms of the Agreement will not be actively discussed with any taxing authorities or any state or governmental authority or with any person or party, except as such disclosures are in compliance with the State’s confidentiality laws. The Department has certain exchange of information agreements in place that allow it to exchange tax information with other taxing authorities. The information contained in the Voluntary Disclosure Agreement may be released as specified in the exchange of information agreements, either through a request for general information or through a request for specific information.
Voluntary Disclosure returns and payments should be mailed to:

For USPS shipping:

Alabama Department of Revenue
Voluntary Disclosure Program
P.O. Box 327005
Montgomery, AL 36132

For other shipping methods:

Alabama Department of Revenue
Voluntary Disclosure Program
50 North Ripley Street
Room 1226
Montgomery, AL 36104

If the Voluntary Disclosure returns and payments are not sent to this address, the taxpayer may receive bills for penalties, in addition to interest.

If you have any questions regarding Voluntary Disclosure, please contact:

Office of Taxpayer Advocacy