How Do You Submit a Voluntary Disclosure to the IRS?

Submitting a voluntary disclosure to the Internal Revenue Service (IRS) provides an opportunity to proactively resolve willful tax law violations before they come to light during an audit or investigation. While this can substantially mitigate the risks involved in acknowledging a willful offense, when submitting voluntary disclosures, taxpayers must be extremely careful to avoid mistakes that could lead to an indictment. Learn more from New Jersey tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group:

Assessing Eligibility to Submit a Voluntary Disclosure

Not all taxpayers are eligible to participate in the voluntary disclosure process. Strict eligibility criteria apply, and, as noted above, submitting a voluntary disclosure is exclusively an option for resolving willful tax law violations. This includes, but is not limited to, willful violations of:

• Bank Secrecy Act (BSA)
• Foreign Account Tax Compliance Act (FATCA)
• Internal Revenue Code (IRC)

In addition to being prepared to disclose willful tax law violations, taxpayers must also be prepared to work with the IRS to accurately determine their tax liability and to pay what they owe (either in a lump sum or via a full-pay installment agreement). Additionally, to qualify as “voluntary,” a disclosure must not be made in response to an audit or investigation.

Seeking “Preclearance” from IRS CI

For eligible taxpayers, the first step in the voluntary disclosure process is to seek “preclearance” from the IRS Criminal Investigation (IRS CI). This is the IRS CI’s procedure for assessing taxpayers’ eligibility. If a taxpayer receives IRS CI’s preclearance, the taxpayer can then submit a Voluntary Disclosure Application.

Navigating the Voluntary Disclosure Process

Preclearance does not guarantee acceptance of a Voluntary Disclosure Application. IRS CI must also accept a taxpayer’s application, and, upon acceptance, IRS CI will forward the taxpayer’s case to a civil examiner.

As IRS CI explains, taxpayers “must cooperate with the examiner in providing requested documents and information.” Failure to cooperate can result in termination of the process, and if this happens, IRS CI can use the information a taxpayer has voluntarily disclosed to pursue enforcement. As a result, taxpayers who submit voluntary disclosures must be committed to resolving their tax controversies with the IRS in good faith.

From assessing eligibility to working effectively with the IRS, all aspects of the voluntary disclosure process require experienced legal representation. If you have questions about whether submitting a voluntary disclosure is your best option, we invite you to contact us for more information.

Request a Confidential Consultation with New Jersey Tax Attorney Kevin E. Thorn

Thorn Law Group is a tax law firm that represents individuals and businesses in high-stakes federal tax controversies. If you need to make an informed decision about submitting a voluntary disclosure to IRS CI, we strongly encourage you to get in touch. To request a confidential consultation with New Jersey tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, give us a call at 201-842-7696 or tell us how we can reach you online today.