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    IRS Voluntary Disclosure

    Although for decades the IRS has had a procedure for making a "voluntary disclosure" of past income tax and financial accounting report filings, this area of the tax law has literally exploded in the last few years. Thousands of U.S. taxpayers fear repercussions from their failure to declare the existence of foreign accounts on their U.S. federal income tax returns, declare all of their foreign income on those returns and file Forms TD F 90-22.1 (FBARs). Yet these failures are only one dimension of the problem. Most taxpayers also pay state income tax and changes in federal tax liability from voluntary disclosures may affect state tax liability.

    The IRS has recently increased the reporting requirements for taxpayers with foreign accounts and assets. The IRS requires a variety of disclosure forms, including FBARs, Forms 5471, Forms 3520 and, most recently, Forms 8938. We advise clients on their current obligations to file these forms as well as the avenues available to address past delinquencies for failure to file such forms.

    We have represented numerous U.S. citizens and U.S. permanent residents with previously undisclosed accounts and assets. We have done so through traditional voluntary disclosures, as well as under the IRS’s several successive special voluntary disclosure programs. We successfully guided a number of clients through the IRS's special 2009 program, in certain cases negotiating reduced penalties. We are also advising numerous clients in the Offshore Voluntary Disclosure Initiative that closed in December 2011.

    The IRS announced a third voluntary disclosure program related to foreign accounts and assets on January 9, 2012. We are currently assisting a number of clients as they negotiate this latest disclosure program. Prospective clients who are interested in participating in this IRS program should not delay contacting us or another qualified tax lawyer.

    For articles we have written about the IRS's voluntary disclosure programs, see:

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