Understanding Voluntary Disclosure

The IRS relies on taxpayers self-reporting their income, offshore bank accounts, real estate holdings, and other reportable assets. Because taxpayers have a voluntary relationship with the IRS, they can often find a way to get back in the agency’s good graces when they find themselves in non-compliance with some provision of tax law. One way the IRS extends mercy to taxpayers who admit wrongdoing is through Voluntary Disclosure. 

What is Voluntary Disclosure?

The IRS’ Voluntary Disclosure program is a safe way for taxpayers to come forward with information that they hid income or some other asset on previous tax returns. According to the IRS, the information disclosed through a Voluntary Disclosure program must be “truthful, timely, and complete.” By coming forward to the IRS, you have essentially made an admission that you potentially committed tax fraud. 

Can I Initiate a Voluntary Disclosure After I Have Been Contacted by the IRS?

The answer to this question is no. For taxpayers to hold up their end of the bargain in a Voluntary Disclosure, they must come to the Criminal Division of the IRS before being contacted by IRS agents due to suspected fraud. The second you become aware of the agency’s attempts to contact you regarding the suspected fraud, you forfeit the privilege to take part in Voluntary Disclosure. This speaks to the timeliness of a Voluntary Disclosure, which is essential for a successful disclosure. 

To be timely, the IRS must receive the Voluntary Disclosure from the taxpayer before initiating a civil examination or criminal investigation. Additionally, the Voluntary Disclosure must be submitted before the IRS receives information about potentially fraudulent activities or non-compliance. 

What are the Advantages of Voluntary Disclosure?

The most significant benefit for taxpayers about the Voluntary Disclosure program is being able to avoid criminal prosecution for non-compliance. While penalties and fees may still be assessed, the IRS will not prosecute taxpayers who complete a Voluntary Disclosure. This insulation from the prospect of prison time proves to be the prime motivating factor for taxpayers. 


While time is ultimately of the essence when deciding whether or not to proceed with a Voluntary Disclosure, you should take the time to sit down with an experienced tax law attorney and decide the best path forward for your situation. Weisberg Kainen Mark is ready to take your case and provide you with an exceptional level of legal care. Call us at 305-374-5544 or get in touch via our website.

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Weisberg Kainen Mark, PL

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