IRS Voluntary Disclosure
New York Tax Controversy Lawyers for IRS Voluntary Disclosures
If you are behind on your federal tax obligations, coming current before the Internal Revenue Service (IRS) takes action can protect against the inherent risks of facing an audit or investigation. In some cases, this will involve submitting a delinquent filing or amended return. But, in others, an IRS voluntary disclosure will be necessary.
IRS Criminal Investigation’s (IRS CI) Voluntary Disclosure Practice provides an opportunity for taxpayers to resolve willful tax law violations without facing scrutiny. However, as IRS CI makes clear, while it considers “timely, accurate, and complete voluntary disclosures . . . when determining whether to recommend criminal prosecution,” making a voluntary disclosure “will not automatically guarantee immunity from prosecution.” As a result, making a voluntary disclosure requires a cautious approach, and it is important to work closely with an experienced New York tax controversy lawyer who can help you make informed decisions.
About IRS CI’s Voluntary Disclosure Practice
As IRS CI explains, “[i]f you have willfully failed to comply with . . . tax-related obligations, submitting a voluntary disclosure may be a means to resolve your non-compliance and limit exposure to criminal prosecution.” The key term here is “willfully.”
Willfully violating the Internal Revenue Code (or any of the various other laws that IRS CI enforces) can lead to criminal charges. Criminal charges carry substantial fines and prison time for individuals, and they carry even greater fines for corporate entities. These are also generally felony offenses, and having a federal felony on your record can impact your life in many ways.
Submitting a voluntary disclosure provides an opportunity to avoid facing criminal charges when prosecution would otherwise be warranted.
While submitting a voluntary disclosure does not automatically guarantee immunity from prosecution, avoiding prosecution is generally the goal. When we represent clients during the voluntary disclosure process, we interface with IRS CI on our clients’ behalf to secure a certain and final outcome. In many cases, this involves negotiating a settlement agreement that precludes criminal enforcement.
The Requirements for Submitting a Voluntary Disclosure
There are several requirements for submitting a valid voluntary disclosure to IRS CI. Determining whether you meet these requirements is a key first step toward determining whether a voluntary disclosure is the best option under the circumstances at hand. Some of the primary requirements are:
- A “Voluntary” Disclosure – For a disclosure to be considered “voluntary,” it must come before the IRS initiates an audit (or IRS CI initiates an investigation), before the IRS receives relevant information from a third party, and before the IRS receives relevant information through another governmental enforcement action.
- Submission of All Required Documentation – Taxpayers in New York seeking protection through IRS CI’s Voluntary Disclosure Practice must submit “all required documentation.” Among other things, this includes a properly completed IRS Form 2848.
- Payment in Full – At the time of disclosure, a taxpayer seeking protection must also pay in full all taxes, interest and penalties due, or else enter into a full-pay installment agreement for the aggregate amount owed.
- Cooperation with the IRS – When submitting a voluntary disclosure, taxpayers must be prepared to cooperate with the IRS to accurately determine their tax liability. This includes providing additional documentation and information upon request.
Taxpayers who are considering a voluntary disclosure must also ensure that their willful violation of the law qualifies under IRS CI’s Voluntary Disclosure Practice. While most tax-related violations qualify, there are exceptions for certain offenses, including offenses involving illegal-source income.
It is important to understand that submitting a voluntary disclosure is just the start of the process of seeking protection from criminal enforcement. IRS CI refers to the initial disclosure as an “application,” and it reviews all applications to determine whether protection under the Voluntary Disclosure Practice is warranted.
How We Assist New York Taxpayers with IRS Voluntary Disclosures
At Thorn Law Group, we have extensive experience assisting at-risk taxpayers with IRS voluntary disclosures. If you are considering a voluntary disclosure, here are just some of the ways we can help you:
- Determining if You Meet the Voluntary Disclosure Requirements – Our attorneys will carefully examine your tax record to determine if you meet the requirements for submitting a voluntary disclosure to IRS CI.
- Communicating Proactively with IRS CI on Your Behalf – Our attorneys will also communicate proactively with IRS CI on your behalf. We will ensure that IRS CI does not already have relevant information (thus disqualifying you from submitting a voluntary disclosure), and we will begin laying the groundwork for a favorable (and final) resolution.
- Preparing and Submitting a Compliant Voluntary Disclosure – Preparing a compliant voluntary disclosure requires intimate familiarity with IRS CI’s Voluntary Disclosure Practice. Our attorneys will prepare and submit your disclosure for you to ensure that unnecessary mistakes do not lead to unnecessary problems.
- Working to Secure a Favorable Resolution with the IRS – Once we submit your voluntary disclosure, we will work diligently to secure a favorable resolution with the IRS. As noted above, in many cases this involves negotiating a settlement with the federal government that assures criminal charges will not be filed.
Before we take these steps, we will also assess whether submitting a voluntary disclosure is in your best interests. While submitting a voluntary disclosure is one way to resolve certain types of tax controversies with the IRS, there are various other means to favorable resolutions as well. With our experience, we can help you make informed decisions, and then we can act quickly to help you avoid facing a high-risk audit or investigation.
Schedule a Confidential Consultation with a New York Tax Controversy Lawyer Today
If you are thinking about submitting a voluntary disclosure to the IRS, it is critical that you speak with a lawyer to ensure that this is your best option. An experienced New York tax controversy lawyer at Thorn Law Group can explain everything you need to know. To schedule a confidential consultation as soon as possible, call us at (914) 534-6004 or send us your contact information online today.
