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DOR Announces Updates to Washington State's Voluntary Disclosure Program

September 23, 2025

The DOR is announcing recent changes to the Voluntary Disclosure Program, effective Sept. 1, 2025. These changes are based on feedback from taxpayers, representatives, and Department of Revenue (DOR) employees and are intended to expand access and allow more applicants to qualify for the program.

About the Voluntary Disclosure Program

The Voluntary Disclosure Program allows unregistered businesses to come forward and pay outstanding tax liabilities. In exchange, DOR agrees to:

  • Limit the lookback period to four years plus current year.
  • Waive certain penalties, including those for delinquent returns, tax assessments, and unregistered penalties.

Expanded eligibility criteria

As of Sept. 1, 2025, DOR has broadened the eligibility criteria. Businesses may now qualify for the program if they:

  • Did not have an active registration with DOR at the beginning of the statutory period (four years plus current year).
  • Did not receive enforcement contact from the Department regarding its registration or reporting requirements during the statutory period (four years plus current year).
  • Did not engage in evasion or misrepresentation. 

Program benefits

  • The “look back” period is limited to the prior four years plus the current year.
  • Up to 39% in penalties may be waived, including:
    • 5% assessment penalty for substantially underpaid tax.
    • 5% unregistered penalty.
    • 29% late payment of a return penalty.
  • DOR can summarize your unreported tax liability in a single tax assessment.

Note: If you collected retail sales or use tax but did not remit it, there is an unlimited look back period, and the 29% late payment of a return penalty will apply only to the collected and unremitted retail sales or use tax amounts (WAC 458-20-228 and 458-20-230).

Full statutory interest will still be imposed on all amounts due.

Additional information

Businesses that had an active registration at the beginning of the statutory period are not eligible for the program. However, they may be eligible for a waiver of the 5% assessment penalty.

Entities affiliated with taxpayers who receive enforcement contact may still qualify for penalty relief if they are voluntarily disclosed to the DOR and we determine the affiliated entity will not be audited. Learn more about the program and how to apply on the DOR website.