What are IRS Voluntary Disclosure Programs?

If you are facing an investigation by the IRS with regard to reporting your taxes you may want to consider participating in one of the organization’s Voluntary Disclosure Programs.IRS - ScrabblePic

What are the Programs?

The IRS currently allows any US taxpayer who is under investigation for violating US tax law the opportunity to voluntarily report any income that is not reported on their taxes for the previous year.

The programs consist of two different categories:

  • The IRS Domestic Voluntary Disclosure Program
  • The IRS Foreign Voluntary Disclosure Program

Domestic Disclosure

The domestic program allows individuals to voluntarily provide the IRS with information concerning any and all forms of undisclosed income which was earned within the territory of the United States.

Foreign Disclosure

This program allows individuals with financial interests in foreign countries to disclose any information concerning their earnings which was not previously reported. These financial interests can be anything from foreign bank accounts to other financial products.

What the Programs Provide

The IRS Voluntary Disclosure Programs operate solely for the guidance of IRS personnel and there are no substantive procedural rights for the taxpayer. However, making a disclosure can significantly help a taxpayer resolve their tax issue with the IRS.

Why You Should Participate

By participating in these programs, you can generally eliminate the risk of criminal prosecution and also avoid substantive civil penalties.

While there is no guarantee that a taxpayer can avoid criminal prosecution for failing to comply with US tax law, these programs can provide much needed relief.

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