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What Factors Do You Need to Consider Before Voluntarily Disclosing Information to IRS CI?

Offshore Account Update

Posted on July 31, 2020 |

Under federal law, the penalties for tax evasion include six-figure fines and up to five years of federal imprisonment. Other tax-related crimes carry even greater penalties. While it is possible to avoid criminal prosecution through the Internal Revenue Service’s (IRS) Voluntary Disclosure Practice, there are several critical factors you need to consider before admitting to the commission of a federal crime. Here, New Jersey IRS voluntary disclosure lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, provides an introduction to what you need to know.

The IRS’ Voluntary Disclosure Practice Offers a Way to Avoid Prosecution for Criminal Tax Violations

The Voluntary Disclosure Practice is administered by the IRS’ Criminal Investigations division (IRS CI). As a result, in order to benefit from voluntarily disclosing information to IRS CI, you need to be guilty of a federal crime. Underreporting your income and underpaying your federal tax liability are not necessarily criminal offenses. So, before you consider sharing information with IRS CI, it is imperative to make sure that both: (i) you are at risk for criminal prosecution, and (ii) it is not too late to make a voluntary disclosure.

If You are Already Under Investigation, You Cannot Make a “Voluntary” Disclosure

IRS CI encourages taxpayers to come forward voluntarily so that it does not have to devote resources to uncovering tax fraud and other crimes that result in loss of revenue for the federal government. This means that if you are already under investigation, it is too late to benefit from the IRS Voluntary Disclosure Practice. Once you are under investigation, any self-disclosures are no longer considered “voluntary.”

When You Make a Voluntary Disclosure to IRS CI, Immunity from Prosecution is Not Guaranteed

Voluntarily disclosing evidence of a tax crime or other tax-related offense to IRS CI does not guarantee immunity from prosecution. Rather, if the circumstances warrant civil liability and you are able to pay what you owe, then it “may result in prosecution not being recommended.” Due to the risk of facing federal prosecution even if you voluntarily disclose your crime to IRS CI, it is imperative that you hire an experienced New Jersey IRS voluntary disclosure lawyer to represent you.

If IRS CI Accepts Your Voluntary Disclosure, You Will Need to Be Prepared to Pay What You Owe

As referenced above, when utilizing the IRS’ Voluntary Disclosure Practice, you need to be prepared to pay what you owe. Even if you are not charged with a crime, you will need to make “good faith arrangements” with IRS CI to satisfy your tax, interest and penalty liability; and, if you do not pay, you will still be at risk for prosecution.

Schedule a Confidential Consultation with New Jersey IRS Voluntary Disclosure Lawyer Kevin E. Thorn

Are you thinking about voluntarily disclosing information to IRS CI in order to avoid prosecution for a federal tax crime or tax-related offense? If so, you need to speak with an attorney first. To schedule a confidential consultation with New Jersey IRS voluntary disclosure lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, call 201-340-5606, email ket@thornlawgroup.com or request an appointment online now.


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