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 five 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 FinCEN Forms 114 (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 increased the scrutiny for taxpayers with foreign accounts and assets. The IRS requires a variety of disclosure forms, including FBARs, Forms 5471, Forms 3520 and Forms 8938. We advise clients on their current obligations to file these forms as well as the avenues available to address past delinquencies.

    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. The IRS has had several successive voluntary disclosure programs and we are actively representing many clients through them. 

    The IRS announced new voluntary disclosure programs related to foreign accounts and assets on June 18, 2014. In addition to updating the main program known as the Offshore Voluntary Disclosure Program (OVDP), the IRS has new and liberalized Streamlined Programs for both domestic and non-resident U.S. taxpayers. We are currently assisting a number of clients as they negotiate these programs. Prospective clients who are interested in participating in this IRS program should not delay contacting us or another qualified tax lawyer. We treat all queries as confidential and subject to attorney-client privilege.

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