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Voluntary Disclosure of Pass-Through Entity Tax Liabilities

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Pass-Through Entity Tax Voluntary Disclosure Agreement

Fiduciary Income & School District Tax Voluntary Disclosure Agreement

Pass-Through Entity & Fiduciary Income Tax Voluntary Disclosure Program FAQs

Ohio pass-through entity tax forms and instructions are located in the searchable FORMS section on the website, as well.

PTE & Fiduciary VDA Program Application Process

The Department does not accept anonymous letters requesting to file as part of the Pass-Through Entity and Fiduciary Income & School District Tax Voluntary Disclosure programs. Please see the following instructions for participation.

The Ohio Department of Taxation is committed to promoting tax compliance. The Department administers the Pass-Through Entities (PTE) Voluntary Disclosure program for S corporations, partnerships or limited liability companies treated as partnerships for federal income tax purposes and the Fiduciary Income & School District Income Tax Voluntary Disclosure program for fiduciaries (trusts and estates) to assist taxpayers with tax compliance. In exchange for voluntarily disclosing unpaid tax liabilities and unfiled returns to the Department, the entity or fiduciary may receive substantially more favorable terms than if discovered to be noncompliant by the Department.

To be eligible for the voluntary disclosure program, the pass-through entity or fiduciary must meet the following four criteria:

  1. The pass-through entity or fiduciary has not previously been contacted by the Department regarding possible pass-through entity income tax or fiduciary income and/or school district income tax liability;
  2. The pass-through entity or fiduciary does not have any outstanding bills or assessments relating to Ohio pass-through entity income taxes or fiduciary income and/or school district income taxes (including for interest or penalties);
  3. The pass-through entity or fiduciary is not, to the best of the pass-through entity’s or fiduciary’s knowledge, under investigation by the Criminal Investigations Division of the Department; AND
  4. The pass-through entity has not previously filed pass-through entity return(s), or the fiduciary has not filed fiduciary and/or school district income tax returns (for estates, if applicable), for tax years 2017-2020.

Taxpayers who wish to utilize the voluntary disclosure program must submit the following items:

  1. Pass-Through Entities: One (1) signed and dated copy of the Pass-Through Entity Voluntary Disclosure Agreement
    Fiduciaries:  One (1) signed copy of the Fiduciary Income & School District Tax Voluntary Disclosure Agreement.
  2. Pass-Through Entities: Completed Ohio IT 4708 Pass-Through Entity Composite Income Tax returns for tax years 2017-2020. NOTE: The IT 1140 Pass-Through Entity & Trust Withholding Tax Return does not satisfy the income tax return filing requirement for the investors. Under the terms of the agreement, the Department will disallow any attempt by the PTE to file IT 1140 returns for the PTE VDA.
    Fiduciaries:  Completed Ohio IT 1041 Fiduciary Income Tax returns and completed SD 100E school district income tax returns (for estates, if applicable) for tax years 2017-2020.
  3. Pass-Through Entities: Payment of pass-through entity composite income tax and interest due (made payable to “Ohio Treasurer of State”) for tax years 2017-2020.
    Fiduciaries:  Payment of fiduciary income tax and interest due (made payable to “Ohio Treasurer of State”) and payment of school district income tax (for estates, if applicable) and interest due (made payable to “School District Income Tax”) for tax years 2017-2020.
  4. Payment of any estimated taxes due for tax year 2021 as of the VDA submission date (if applicable).
  5. Pass-Through Entities: Attach the payment to a universal payment coupon Ohio IT 4708 UPC.
    Fiduciaries: Attach the payment to a universal payment coupon Ohio IT 1041 UPC and SD100E ES (for estates, if applicable).

Send these required items to the following address:

Ohio Department of Taxation
Employment Tax Division
Voluntary Disclosure Program
4485 Northland Ridge Blvd
Columbus, OH 43229

Taxpayers who are not eligible for the voluntary disclosure program or who do not provide all of the required items will not be given the favorable protections offered in the VDA.

Please note: Most other taxes administered by the Department (Commercial Activity Tax, Employer Withholding, Sales and Use Tax, Resort (RAGRET), etc.) offer a VDA program for taxpayers to come forward under more favorable terms than if discovered by the Department. For additional information, please see those specific taxes by selecting "Business" across the top of our website then selecting "Voluntary Disclosure Program" under “Additional Business Resources” and the tax type you wish to consider.

Interest Calculation

Interest is computed on the tax due for each period as follows:

# of days / 365 or 366   x   Interest Rate   x   Tax Due   =   Interest Due

For your convenience, please use the online interest calculator located in the expanded Additional Resources section at the bottom of this page.

Interest Rates

Calendar Year Interest Rate
2018 4%
2019 5%
2020 Leap Year 5%
2021 3%

 

Example: Interest on a $500 Ohio tax due for tax year 2017 would be computed as follows (assume tax was due April 18, 2018 and paid on Jan. 31, 2021):

2018 04/18/18 through 12/31/18 = 257/365 x 4% x $500 = $ 14.08
2019 01/01/19 through 12/31/19 = 365/365 x 5% x $500 = $ 25.00
2020 01/01/20 through 12/31/20 = 366/366 x 5% x $500 = $ 25.00
2021 01/01/21 through 12/31/21 = 31/365 x 3% x $500 = $ 1.27
TOTAL INTEREST  $    65.35