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What Is Voluntary Disclosure?

Domestic voluntary disclosure is a term used by the Internal Revenue Service to describe the voluntary reporting of income made from money or assets in the United States. Its counterpart is foreign voluntary disclosure, where the income originates from foreign money or assets.

Can I Avoid Criminal Consequences For Unreported Income?

The IRS offers voluntary disclosure as a way for individuals or entities to correct past tax reporting mistakes or omissions, come into compliance with federal tax laws, and potentially avoid criminal consequences for tax fraud. To be considered voluntary, the taxpayer generally must come forward before the IRS learns of the unreported tax. If the IRS has learned of the unreported income from another source, the taxpayer will likely be ineligible for the voluntary disclosure program.

What Form Is Used To Apply For The Voluntary Disclosure Program?

The IRS has new procedures for the voluntary disclosure program. Taxpayers start by submitting a preclearance request to the IRS on Form 14457. If approved, the IRS will send the taxpayer a letter, granting preclearance. The taxpayer then submits the documentation required by Form 14457, including a written narrative explaining their noncompliance.

From there, the case proceeds similarly to an IRS tax audit, with the taxpayer responding to IRS inquiries and typically filing amended tax returns for the years at issue.

Do I Need Legal Help To Fill Out The IRS Voluntary Disclosure Form?

The extent of a taxpayer’s cooperation with the IRS during the voluntary disclosure process impacts the outcome. In addition to paying the unpaid taxes, the taxpayer may also be facing civil and criminal penalties, even jail time. This is why it is so important to consult with an attorney.

Our law firm is thoroughly familiar with the voluntary disclosure program. We know how to advocate for your best interests throughout the program.

Get Ahead Of The Problem

Before the IRS closes in, contact an experienced tax attorney and maximize your legal options. Tax evasion carries criminal consequences. The voluntary disclosure program can be a way to avoid prison time and come into compliance with federal tax laws.

Schedule a no-obligation, confidential consultation with our Boston tax lawyer by calling 866-485-7019. You can easily reach us online. Our offices are located in Framingham, minutes from the Massachusetts Turnpike, and in Boston.