Limited look-back clause
If you owe taxes for more than three years, you may request a limited look-back clause during the online Voluntary Disclosure and Compliance (VDC) program application process. This will allow you to voluntarily disclose your entire tax liability but only file returns and pay the tax and interest due in full (penalties will be waived) for the look-back period.
In turn, we will not require you to file returns for tax years or periods prior to the look-back period, or seek recovery for that earlier period for the particular type of tax violation disclosed. We may audit you for other taxes unrelated to the disclosure for periods prior to the look-back period.
See our FAQs for more information about the limited look-back clause.
Limited look-back period eligibility
We will consider adding a limited look-back clause to your VDC agreement under certain circumstances.
| Circumstance | Look-back period with full payment requirement |
| Collected sales and withholding tax (trust taxes) not remitted to the state | The shorter of six years or the period that begins with the earliest date on which the tax was collected or withheld and ending with the most recently completed tax period |
| Tax fraud or tax evasion (other than collected trust taxes) | Six-year look-back period |
| Mistake, confusion, ignorance of the law, inability to comply, or some other similar explanation (other than cases involving collected trust taxes) | Three-year look-back period |
How to apply for a limited look-back clause
To request a limited look-back clause as part of your VDC agreement, you must explain why you owe back taxes and may be eligible for the limited look-back period in the narrative section of your online application.
We will contact you (or your representative) if we need additional information or to discuss whether the limited look-back period requested is acceptable to the Department.
Taxpayer protections: Full voluntary disclosure versus limited look back
If you desire the strongest protection from possible criminal prosecution, you should make the broadest disclosure and not request a limited look-back clause in your VDC application. You must also comply with the terms of your compliance agreement.
| Full voluntary disclosure protections | Limited look-back clause protections |
| No New York State prosecutor or district attorney can bring criminal tax prosecution against you for a fully disclosed and paid tax liability under this program.
The Department cannot share any disclosure you make with any other agency or use it against you as evidence in any criminal action or proceeding brought against you. |
You will receive the full voluntary disclosure protections for the look-back period.
You will receive the Department’s promise that it will:
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