5 Important Considerations for IRS Disclosures

If you are behind on your federal tax filing or payment obligations, disclosing the deficiency to the IRS could be your best option. The alternative is to risk facing an audit or investigation—which can substantially increase the costs of noncompliance. But, before you disclose your tax law violation to the IRS, there are several important factors to consider, as Virginia tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, explains.

What To Consider Before Disclosing a Tax Violation to the IRS

While proactively disclosing a tax law violation to the IRS and coming current on your federal tax obligations will be the best approach in most cases, different scenarios call for different approaches. With this in mind, here are five key considerations to address before disclosing a violation to the IRS:

1. Is the Violation Civil or Criminal in Nature?

Tax law violations can either be civil or criminal in nature depending on the circumstances involved. Not only do criminal violations present heightened risks, but they also present different options for seeking a proactive resolution.

2. Which Type of IRS Disclosure is Best?

Once you have determined whether you are facing civil or criminal exposure, then you can decide which type of IRS disclosure is best in light of the circumstances at hand. Broadly speaking, there are three primary options available:

• Filing an amended or delinquent return
• Submitting a streamlined filing
• Submitting a voluntary disclosure

3. Should You Seek Any Form of Relief from Liability?

Regardless of which option you choose, you will also want to carefully consider whether you should seek any form of relief from liability. In many cases, taxpayers can substantially mitigate their liability by taking a proactive approach to resolving their tax controversies. Here, too, there are three primary options available:

• Offers in compromise
• Penalty abatement
• Settlement agreements

4. Are You Already the Subject of an IRS Audit or Investigation?

Streamlined filings and voluntary disclosures are options for taxpayers who are not yet facing scrutiny from the IRS. As a result, if you are already the subject of an IRS audit or investigation, you will need to approach your situation very differently. If you aren’t sure whether you are currently being targeted, your Virginia tax attorney can engage with the IRS on your behalf to determine what options you have available.

5. What is the Correct Process for Submitting Your Chosen IRS Disclosure?

In all cases, avoiding unnecessary liability through an IRS disclosure involves carefully following the requisite processes and procedures. As a result, before you move forward, it will be critical to ensure that you have a clear understanding of what to do (and what not to do) as you attempt to resolve your tax controversy with the IRS.

Discuss Your IRS Disclosure Options with Virginia Tax Attorney Kevin E. Thorn

If you would like to discuss your IRS disclosure options with Virginia tax attorney Kevin E. Thorn, we encourage you to contact us promptly. Call 703-752-3752 or contact us confidentially online to request an appointment today.