Should Delinquent U.S. Taxpayers Submit a Streamlined Filing or Voluntary Disclosure in 2026?

For delinquent U.S. taxpayers, taking a wait-and-see approach is rarely (if ever) the best option. Federal tax audits and investigations present substantial risks—and the risks can be even greater when taxpayers have ignored filing and payment deficiencies. The IRS is continuing to offer two streamlined voluntary disclosure programs in 2026, both of which are options in very different sets of circumstances. Learn more from New York international tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group.

Submitting a “Streamlined Filing” vs. Submitting a “Voluntary Disclosure”

As it has in previous years, the IRS is offering two very different streamlined voluntary disclosure programs in 2026. While both programs provide opportunities for U.S. taxpayers to proactively resolve federal tax delinquencies, their similarities end there.

Streamlined Filings: An Option for Resolving Certain Non-Willful Violations

Submitting a “streamlined filing” is an option for taxpayers who are behind on their foreign financial asset disclosures. Under the Bank Secrecy Act (BSA) and Foreign Account Tax Compliance Act (FATCA), U.S. taxpayers who own qualifying offshore accounts and other foreign financial assets must disclose these assets annually.

However, taxpayers’ obligations under the BSA and FATCA are not widely known, and as a result, violations are common. Recognizing this, the IRS has established streamlined filing compliance procedures that allow taxpayers to make the necessary filings when they learn they are not in compliance.

Voluntary Disclosures: An Option for Resolving Willful Tax Crimes

While the IRS’s streamlined filing compliance procedures provide a way for taxpayers to resolve qualifying non-willful BSA and FATCA violations, IRS CI’s Voluntary Disclosure Practice provides a way for taxpayers to resolve all types of willful federal tax law violations. While submitting a voluntary disclosure does not guarantee protection against criminal prosecution, “a voluntary disclosure may result in prosecution not being recommended.”

Given the potential risks, taxpayers considering voluntary disclosures in 2026 must carefully determine whether this is the best option under the circumstances. Participating in IRS CI’s Voluntary Disclosure Practice is a multi-step process, and mistakes or oversights at any step in the process can have serious consequences.

Taxpayers Who Submit a Streamlined Filing or Voluntary Disclosure Must Be Prepared to Pay What They Owe

Generally speaking, taxpayers who submit a streamlined filing or voluntary disclosure must be prepared to pay what they owe. While entering into a full-pay installment agreement may be an option, these programs are not intended to be a means for taxpayers to mitigate their liability. For those who cannot afford to pay what they owe, this is a key consideration to discuss with experienced tax counsel before moving forward.

Request a Confidential Consultation with New York International Tax Attorney Kevin E. Thorn

Do you have questions about your options for coming into compliance in 2026? If so, we encourage you to get in touch. To request a confidential consultation with New York international tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, call us at 914-534-6004 or contact us online today.