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Voluntary Disclosure

voluntary irs disclosure

The Voluntary Disclosure Program

If you owe the IRS money, it is usually only a matter of time before they come to collect. Whether you failed to file, did not disclose all of your income, or for any other reason, getting in touch with them before they come after you is always the better scenario. To make it easier, the IRS and many states have a program called Voluntary Disclosure, wherein an individual or organization can come forward and volunteer information before the situation worsens.

Reducing Your Penalties

You may wonder why the IRS would create a program like this. It may even sound like a trap, but this is a legitimate program. While it provides obvious benefit to the IRS, it also offers benefits to the taxpayer. If a taxpayer or organization discloses unpaid taxes prior to being discovered by the IRS, there are usually reduced penalties. More importantly, the chances of the IRS filing criminal charges against the taxpayer are greatly reduced.

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Criminal Charges and Prosecution by the IRS

A Voluntary Disclosure does not guarantee that there will be no criminal charges, but the IRS is likely to be more lenient with those who come forward and agree to cooperate, before they have to spend taxpayer dollars to discover the inaccuracy and track down the person responsible. The IRS may choose not to prosecute a person who volunteers the information willingly, providing they do so early enough. What is early enough? The IRS considers the information to be “timely” when it is received before a criminal investigation has been initiated or before someone has reported the issue or you have been otherwise implicated.

It’s Best to Come Forward before Getting Caught

The penalties for not coming forward are severe. This applies to people who have mistakenly (especially unwittingly) failed to report assets or income and pay the appropriate taxes. It also pertains to anyone who willfully hides assets and income, either domestic or foreign (offshore accounts). The IRS offers this program so that taxpayers have a path out of the negative situation of growing debt and penalties and the threat of investigation.

We can Help

Call CPA Accounting and Tax Services today at 407-382-6658. We want to help. We will assess the facts and circumstances in your case and can help you file the appropriate paperwork. No one wants to find themselves in this situation. We understand the complex issues that can lead to this and we know the tax law and how best to help you become compliant, so you can stop worrying and looking over your shoulder.

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