The Future of Voluntary Disclosure
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AbstractThe IRS in March announced that the 2014 offshore voluntary disclosure program will close on September 28.1 It is unclear what rules will apply to taxpayers who make voluntary disclosures after that date. If the IRS does not provide new voluntary disclosure procedures for willful noncompliance, taxpayers will face uncertain penalties under so-called quiet disclosures and the traditional voluntary disclosure practice outlined in the Internal Revenue Manual (IRM disclosures). That uncertainty — and the potential for inconsistent treatment of similarly situated taxpayers — would
increase the costs of becoming compliant and ultimately discourage taxpayers from making voluntary disclosures.

This article thus calls for the IRS to adopt permanent voluntary disclosure procedures. They would be permanent in the sense that there would always be a way for taxpayers to disclose their noncompliance and receive a predictable, reduced penalty. However, the specific rules under those procedures would be subject to change by the IRS. As detailed later, the permanent procedures could incorporate efficiencies of the 2014 OVDP while correcting some of its flaws, including the problematic aspects of the program’s penalty policy.
All Author(s) ListNoam Noked
Journal nameTax Notes
Volume Number160
Issue Number6
PublisherTax Analysts
Pages783 - 792
LanguagesEnglish-United States

Last updated on 2020-07-04 at 15:01