IRS Criminal Investigation Voluntary Disclosure Practice

Offshore Voluntary Disclosure Program (OVDP)

The Offshore Voluntary Disclosure Program (OVDP) closed on September 28, 2018 and the latest update was issued on November 20, 2018 to supplement IRM 9.5 regarding the voluntary disclosure practice, which is called the IRS Criminal Investigation Voluntary Disclosure Practice, which is explained below:

 

IRS Criminal Investigation Voluntary Disclosure Practice

 What is the Voluntary Disclosure Practice? 

The Voluntary Disclosure Practice is a longstanding practice of IRS Criminal Investigation (CI). CI takes timely, accurate, and complete voluntary disclosures under consideration when determining whether to recommend criminal prosecution. A voluntary disclosure will not automatically guarantee immunity from prosecution; however, a voluntary disclosure may result in prosecution not being recommended.

A voluntary disclosure occurs when you provide a truthful, timely, and complete disclosure to CI through designated procedures. It also requires you to:

• Cooperate with us in determining your correct tax liability and
• Make good faith arrangements with us to pay – in full – the tax, interest and any applicable penalties you owe.

A disclosure is timely if we receive it before we have:

1- Commenced a civil examination or criminal investigation

2- Received information from a third party (e.g., informant, other governmental agency, John Doe summons, etc.) alerting us to your noncompliance

3- Acquired information directly related to your specific noncompliance from a criminal enforcement action (e.g., search warrant, grand jury subpoena, etc.)

Who may disclose ?

The Voluntary Disclosure Practice is a compliance option if you have committed tax or tax-related crimes and have criminal exposure due to your willful violation of the law. Taxpayers who participate in the Voluntary Disclosure Practice intend to seek protection from potential criminal prosecution. 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. See the box “Voluntary Disclosure Not for You?” for useful links on other options.

Note: This practice does not apply to taxpayers with illegal sources of income. Income from activities determined to be legal under state law but illegal under federal laws is considered illegal source income for purposes of the Voluntary Disclosure Practice.

How to disclose?

There is a two-part process to request to participate in the Voluntary Disclosure Practice. To apply for the Voluntary Disclosure Practice, you must first:

• Fill out Part I of Form 14457, Voluntary Disclosure Practice Preclearance Request and Application (PDF) to request preclearance. Preclearance determines your eligibility for the practice but does not guarantee preliminary acceptance into the practice.
   
• Submit Part I by either:
  • Fax: 267-466-1115; or
     
  • Mail:
    • IRS Criminal Investigation
      Attn: Voluntary Disclosure Coordinator

2970 Market St.
1-D04-100
Philadelphia, PA 19104
 

• Once you have received preclearance confirmation, you must submit Part II of the Voluntary Disclosure Application within 45 days or make a written request for additional time. Extension requests will be approved on a case-by-case basis. No more than one, 45 day, extension will be permitted.
  
  CI will review your submission on Part II of Form 14457 and determine if you can participate in the Voluntary Disclosure Practice. If approved to participate, CI will provide you with a Preliminary Acceptance Letter, and CI will forward your Form 14457 to a civil section of the IRS. Once your case is assigned, an examiner will contact you.

You must cooperate with the examiner in providing documents and information. See Updated Voluntary Disclosure Practice for the most current Voluntary Disclosure procedures.

Zaher Fallahi, Tax Attorney, CPA, represents taxpayers nationwide with their offshore voluntary disclosure practice (OVDP), streamlined procedures, delinquent FBAR filing, delinquent international information return filing and foreign gifts. Contact Information:

(877) 687-7558 Nationwide Toll Free

(310) 719-1040 (Los Angeles)

(714) 546-4272 (Orange County)    E-mail taxattorney@zfcpa.com