IRS Voluntary Disclosure Program

Here are some common reasons why individuals and businesses would need to use the VDP:

• Failure to Report Foreign Bank Accounts: Many taxpayers with offshore accounts may not have reported them properly, and this can lead to harsh penalties under the Foreign Bank Account Reporting (FBAR) rules. The VDP provides an opportunity to disclose those accounts and reduce penalties.

• Unpaid Federal Income Taxes: If you have failed to report substantial income on your federal income tax returns, whether from domestic or international sources, the IRS will consider this a willful violation. The VDP allows you to disclose this income and settle the unpaid taxes.

• Failure to Report Employment, Gift, or Estate Taxes: Non-compliance with employment taxes, such as not paying proper withholding taxes for employees, or failing to report gift or estate taxes, can lead to serious consequences. The VDP helps you bring these issues to light and resolve them with the IRS.

Segal Cohen & Landis is prepared to help you understand if you qualify for the VDP and to guide you through the process, ensuring that you avoid the most severe consequences while coming into full compliance with IRS regulations.

Key Benefits of the Voluntary Disclosure Program:

While the IRS VDP does not guarantee immunity from prosecution, it does offer significant benefits that can help mitigate the consequences of non-compliance:

• Avoid Criminal Prosecution: The most significant benefit of participating in the VDP is the opportunity to avoid criminal prosecution. By voluntarily disclosing your tax non-compliance before the IRS discovers it through an audit or investigation, you can potentially avoid criminal charges altogether.

• Reduced Financial Penalties: Participants in the VDP are subject to lower financial penalties than those who do not disclose voluntarily. For instance, those who voluntarily disclose foreign accounts may face a reduced FBAR penalty, which can be as high as 50% of the account balance for those found to have willfully violated reporting requirements.

• Closure and Peace of Mind: Participating in the VDP allows you to resolve outstanding tax issues and move forward without the fear of future IRS audits or investigations into past tax years.

How the VDP Process Works:

At Segal Cohen & Landis, we take a proactive and structured approach to the Voluntary Disclosure Program, ensuring that your case is handled professionally and efficiently. The steps involved in the VDP process include:

• Preclearance Request (Form 14457): The first step in the VDP is to submit a preclearance request to the IRS Criminal Investigations Division using Form 14457. This step allows the IRS to determine if you are eligible for the VDP. It’s crucial to work with experienced tax attorneys during this stage, as a pre-clearance request must be accurate and complete.

• Submission of Complete Disclosure: Once you receive pre-clearance, you will need to submit a full disclosure, including all delinquent or amended tax returns for up to six years. This includes filing all relevant FBAR forms for foreign accounts, amended income tax returns, and any other necessary tax filings.

• Negotiation of Penalties: The IRS will review your disclosure and may impose penalties, depending on the severity of the non-compliance. However, the penalties are often far lower for those who voluntarily come forward than for those who are caught by the IRS.

• Audit and Resolution: The IRS may audit your tax returns as part of the voluntary disclosure process. However, with the assistance of our attorneys, we ensure that your audit process runs smoothly, helping you comply fully and minimizing the penalties you face.

Why Choose Segal Cohen & Landis?

Our team of tax attorneys at Segal Cohen & Landis has extensive experience in handling voluntary disclosure cases. We understand the intricacies of the IRS processes and can help ensure that your disclosure is done properly. By choosing us, you’ll benefit from:

• Attorney-Client Privilege: Unlike working with accountants or other tax professionals, your communications with us are protected by attorney-client privilege, offering you the highest level of confidentiality.

• Comprehensive Representation: From the preclearance stage to the resolution of your case, we handle all aspects of your voluntary disclosure.

• Experience with Complex Tax Matters: We have years of experience dealing with complex tax matters, including offshore accounts, high-net-worth individuals, and businesses with substantial compliance issues.

See What the IRS Has to Say About The IRS Voluntary Disclosure Program

https://www.irs.gov/compliance/criminal-investigation/irs-criminal-investigation-voluntary-disclosure-practice

Take Action Today

The IRS Voluntary Disclosure Program offers you a valuable opportunity to come into compliance before the IRS takes action. At Segal Cohen & Landis, we are committed to helping you navigate this complex process and ensuring that you achieve the best possible outcome. Contact us today to schedule a confidential consultation and begin the voluntary disclosure process.