Should You Take Advantage of the IRS’ Voluntary Disclosure Practice in Order to Avoid a Criminal Investigation?

If you owe money to the Internal Revenue Service (IRS), you have options available for mitigating your liability and reducing your risk of criminal prosecution. However, in order to take advantage of these options, you may need to act quickly, and it will be important to make informed decisions based on the advice of an experienced Virginia IRS voluntary disclosure lawyer.

What is the IRS’ Voluntary Disclosure Practice?

The IRS’ Voluntary Disclosure Practice is a “compliance option” for U.S. taxpayers who are at risk for criminal prosecution due to the commission of a tax crime or a tax-related criminal offense. Under the Voluntary Disclosure Practice, taxpayers can work with IRS Criminal Investigations (IRS CI) to determine what they owe and satisfy their outstanding liability without facing criminal prosecution.

However, voluntary disclosure to IRS CI does not guarantee protection from prosecution. Rather, “a voluntary disclosure may result in prosecution not being recommended.” As a result, prior to voluntarily disclosing anything to IRS CI, taxpayers should consult with experienced criminal tax counsel to determine whether the Voluntary Disclosure Practice is their best option.

Who Can Take Advantage of the IRS’ Voluntary Disclosure Practice?

The IRS’ Voluntary Disclosure Practice is an option for U.S. taxpayers who are at risk for criminal prosecution. As IRS CI explains, “If your violation of the law was not willful, you should consider other options including correcting past mistakes by filing amended or past due returns.” Voluntarily disclosing information to IRS CI is not a matter that taxpayers can afford to take lightly, and it should only be considered when there is a risk of facing criminal prosecution. If you have inadvertently filed inaccurate returns, then there are alternatives available that are better suited to your personal circumstances.

When Can You Utilize the IRS’ Voluntary Disclosure Practice?

If you are at risk for criminal prosecution, there are two main factors to consider when deciding whether to utilize the IRS’ Voluntary Disclosure Practice: (i) ability to pay, and (ii) timing.

Voluntarily disclosing information to IRS CI is just the first step in the Voluntary Disclosure Practice. In order to be eligible for a recommendation against prosecution, you must also cooperate with IRS CI in determining your federal tax liability, and you must be prepared to pay the tax, interest and penalties you owe. Additionally, if any of the following have already occurred, then it is too late to take advantage of the Voluntary Disclosure Practice:

• IRS CI has commenced a civil examination or criminal investigation;
• IRS CI has received a tip from a third party; or,
• IRS CI has acquired incriminating information through a search warrant, subpoena, or other law enforcement activity.

Discuss Your Situation with a Virginia IRS Voluntary Disclosure Lawyer

Do you need to seek protection against prosecution for a federal tax crime? If so, we can help. To schedule a confidential consultation with Virginia IRS voluntary disclosure lawyer Kevin E. Thorn, Managing Partner at Thorn Law Group, call 703-752-3752, email ket@thornlawgroup.com or contact us confidentially online now.