IRS Criminal Investigation Voluntary Disclosure Practice

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

• Timely submit all required documentation including a Form 2848 for each taxpayer and entity entering the program,
• Cooperate with the IRS in determining your correct tax liability, and
• Pay in full or secure a full-pay installment agreement for the tax, interest and any applicable penalties you owe.

A voluntary 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.).

The VDP is a longstanding practice of IRS Criminal Investigation (CI). CI accepts 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.

The VDP is a compliance option if you have willfully failed to comply with tax or tax related obligations or committed tax or tax-related crimes and therefore have criminal exposure due to your willful violation of the law. Taxpayers who participate in the VDP intend to seek protection from potential criminal prosecution.

If your failure to comply with tax or tax related obligations or violation of the law was not willful, in other words, you feel you made an error or mistake, you should consider other options including correcting past mistakes by filing amended or past due returns. See 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 VDP.

There is a two-part electronic application process to request participation in the VDP. Part I is a preclearance to determine your eligibility for the program and Part II is a determination of your preliminary acceptance.

To apply, you must first:

• Have ready all required documentation as outlined in the Form 14457 instructions. If the Voluntary Disclosure is being presented through a power of attorney, a Form 2848, Power of Attorney and Declaration of Representative PDF must be submitted for each individual taxpayer and entity entering the program.
• Fill out Part I of Form 14457, Voluntary Disclosure Practice Preclearance Request and Application PDF to request preclearance.
• Fax your application to 844-253-5613.

Once CI receives your Part I, we will determine if you are pre-cleared to enter the practice. Preclearance determines your eligibility for the practice but does not guarantee preliminary acceptance into the practice.

• Once you have received a preclearance letter, you must electronically submit Part II of the Voluntary Disclosure Application within 45 days.  CI will review your submission on Part II of Form 14457 to determine pre-acceptance in the VDP.
• If approved to participate, CI will provide you with a Preliminary Acceptance Letter, and your Form 14457 will be forwarded to a civil section of the IRS.

Once your case is assigned to a civil examiner, you will be contacted.  You must cooperate with the examiner in providing requested documents and information. You will be required to provide a statement acknowledging your willful failure to comply with tax or tax related obligations.

If you are unable to submit Part II of the voluntary disclosure application within 45 days of the preclearance letter, you may voluntarily withdraw from the program or make a written request to vdp@ci.irs.gov for an extension. Extension requests will be approved on a case-by-case basis and no more than one 45-day extension will be permitted.

For more detailed instructions on how to submit your VDP application, see the instructions attached to the Form 14457, Voluntary Disclosure Practice Preclearance Request and Application PDF, for the most current voluntary disclosure procedures.

For questions regarding the status of pre-clearance requests or preliminary acceptance, taxpayers/representatives may contact IRS-CI via email at vdp@ci.irs.gov.

Once you receive preliminary acceptance, when you have questions or need a status update, email lbieefaustinoffshore@irs.gov. A civil examiner will respond timely.