Voluntary Disclosure Practice and Streamlined Filing Compliance Procedures

The IRS has two very different compliance paths for two very different populations of taxpayers (taxpayers who have exposure to criminal liability for tax and tax-related crimes and taxpayers who have non-willful international compliance issues). First, 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. Form 14457 is used for all voluntary disclosures. This redesigned form is to be used by taxpayers to apply for the IRS-CI Voluntary Disclosure Practice (VDP). The form is submitted by the taxpayer in two parts. Part I is a preclearance request. Once a taxpayer receives preclearance from IRS-CI, they will submit Part II, the voluntary disclosure application. Versions prior to March 2019 were used by taxpayers to apply for the IRS Offshore Voluntary Disclosure Program (OVDP) that closed on September 28, 2018. Second, the Streamlined Filing Compliance Procedures are available to eligible taxpayers who can truthfully certify that their failure to report foreign financial assets and pay all tax due in respect of those assets resulted from non-willful conduct. Forms 14653, 15023, and 14654 relate to the Streamlined Filing Compliance Procedures. The use of information collected with respect to the Voluntary Disclosure Practice and the Streamlined Filing Compliance Procedures is a necessary for the Commissioner to use his enforcement discretion and authority to offer specific compliance paths with favorable penalty provisions under IRC § 7803(a)(2)(A) granting him the authority to “administer, manage, conduct, direct, and supervise the execution and application of the internal revenue laws or related statutes and tax conventions to which the United States is a party.” Additionally, IRC § 6001 requires taxpayers to retain records relating to tax liabilities and tax returns and is thereby related to the information collected by the forms used in the Voluntary Disclosure Practice and the Streamlined Filing Compliance Procedures.

The latest form for Voluntary Disclosure Practice and Streamlined Filing Compliance Procedures expires 2028-04-30 and can be found here.

Streamlined Non-filer Program

Federal Enterprise Architecture: General Government - Taxation Management

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