The Washington Department of Revenue’s Administrative Revenue and Hearings Division ruled that a company’s audit disqualifies its affiliates from participating in the state’s voluntary disclosure (VDA) program. One of the criteria for participating in the program requires that a business must have never been contacted by the Department for enforcement purposes including audits. The Division noted that the audit notice letters sent to the company indicated that the audit might reach the company’s affiliates and subsidiaries.
The Division concluded that while the separate treatment of incorporated entities is a key feature of the state’s tax structure, the audit of an affiliated entity constituted a prohibited contact for purposes of the voluntary disclosure program.

Wash. Dept. Rev. Det. No. 18-0070, 39 WTD 001 (2020).