IRS Voluntary Disclosure Program
The IRS Voluntary Disclosure Program is one of the most powerful — and underutilized — tools in federal tax law. When used correctly, it can completely eliminate criminal prosecution for unreported income, tax fraud, offshore accounts, cryptocurrency violations, and other serious tax issues.
There is one catch: it only works before the IRS finds you first.
How the Voluntary Disclosure Program Works
The IRS Voluntary Disclosure Practice (VDP) is governed by IRM 9.5.11.9. It allows a taxpayer who has committed a tax crime — whether intentionally or not — to come forward proactively, correct their filings, pay what they owe, and receive a strong presumption against criminal prosecution in exchange.
The IRS's long-standing policy is that taxpayers who make voluntary disclosures that are timely, accurate, and complete will generally not be criminally prosecuted. This policy has been in place for decades and is one of the most reliable safe harbors in all of tax law — when properly executed.
What voluntary disclosure does not do: it does not eliminate civil taxes owed, interest, or the civil fraud penalty (typically 75% of underpaid tax). The financial cost is significant. But it removes the existential risk: federal indictment, criminal trial, and prison.
Attorney-Client Privileged Assessment
We assess your situation confidentially. Everything you tell us is protected by attorney-client privilege — the IRS cannot compel us to disclose it. We determine whether VDP is available, whether you are at risk, and what the most strategic path is.
Pre-Clearance Request
Before disclosing anything to the IRS, we submit a pre-clearance request through IRS CI to confirm you are not already under investigation. This is done anonymously. If cleared, we proceed with the formal disclosure.
Prepare and Submit Disclosure
We prepare all required amended returns, financial documentation, and the formal disclosure package. Accuracy and completeness are essential — an incomplete disclosure forfeits the protections of the program.
IRS Processing and Civil Resolution
The IRS reviews the disclosure and conducts a civil examination. We represent you throughout, negotiate penalties where possible, and work toward the most favorable civil resolution.
Full Resolution and Compliance
Once resolved, you have a clean slate. We ensure your ongoing compliance to prevent any future recurrence — and document your good-faith efforts throughout.
Types of Voluntary Disclosure
Domestic Voluntary Disclosure
For taxpayers with unreported domestic income, hidden business revenue, inflated deductions, or other civil fraud issues who want to resolve before the IRS identifies them.
Must file before IRS opens a criminal investigationOffshore / Foreign Account Disclosure
For taxpayers with undisclosed foreign bank accounts, offshore structures, foreign income, or FBAR violations. The streamlined filing procedures may be an alternative in non-willful cases.
FATCA has made offshore accounts nearly impossible to hideERC Voluntary Disclosure Program
A specific IRS program allowing businesses to return improper Employee Retention Credits at a reduced rate (80%) with no penalties, before criminal referral.
Active program — limited availabilityCryptocurrency Voluntary Disclosure
For taxpayers with unreported crypto gains, NFT transactions, DeFi income, or mining revenue. Blockchain forensics make non-disclosure increasingly risky.
IRS John Doe summons to exchanges are ongoingVoluntary Disclosure — Frequently Asked Questions
What exactly does the Voluntary Disclosure Program protect me from?
A successful voluntary disclosure creates a strong presumption against criminal prosecution. The IRS has historically not criminally prosecuted taxpayers who make timely, accurate, and complete voluntary disclosures — but this protection is not absolute, is not guaranteed by the program itself, and can be lost if your disclosure is incomplete or inaccurate. It does not eliminate civil penalties — you will still owe back taxes, interest, and typically a fraud penalty of 75% of the tax. The protection is from criminal prosecution: no indictment, no trial, no prison.
How do I know if I am already under investigation?
Common signs: IRS special agents have visited you, you received a letter from IRS Criminal Investigation (not collections), a DOJ attorney has contacted you, you received a federal grand jury subpoena, your bank received a grand jury subpoena for your records, or a business associate has been indicted for a tax offense that involved you. If any of these have occurred, the voluntary disclosure window may have already closed for you.
What happens if the IRS finds me before I disclose?
The voluntary disclosure option is only available if you come forward before the IRS has begun a criminal investigation or received information from a third party about your specific situation. Once CI opens a case, you cannot make a voluntary disclosure — you are then in the criminal defense phase, not the disclosure phase. This is why timing is everything.
Do I have to file amended returns as part of the VDP?
Yes. Voluntary disclosure requires filing accurate returns for all relevant years, paying all back taxes owed, and cooperating with the IRS throughout the process. The IRS typically requires 6 years of amended returns for domestic disclosures, though this can vary. We manage the entire filing and negotiation process on your behalf.
Can I do a voluntary disclosure without an attorney?
Technically yes — but it is extremely inadvisable. An incomplete, inaccurate, or poorly structured voluntary disclosure can actually increase your risk by putting the IRS on notice of potential fraud without providing the protections of a proper VDP submission. The submission itself must be crafted carefully. Attorney-client privilege protects your communications with us throughout the process; no such privilege protects what you tell the IRS directly.
Are there alternatives to VDP for offshore accounts?
Yes — the IRS Streamlined Filing Compliance Procedures offer a reduced-penalty path for taxpayers whose offshore non-compliance was non-willful. Domestic streamlined filers pay only back taxes and interest with no penalties. Offshore streamlined filers pay a 5% penalty. The determination of willfulness vs. non-willfulness is critical and requires careful attorney analysis before filing.
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