Voluntary Disclosure Programs: Proactive Tax Resolution


Filing tax returns is a detailed and complicated process, and as such, it can be easy for a taxpayer to make a mistake. If you have recently discovered a tax issue – whether it was due to your error or someone else’s – you might be curious about whether you should resolve that issue. The answer is YES. Owing a substantial amount of money for a tax problem is bad enough. But avoiding the issue and owing additional penalties and interests can make those financial hardships even worse. Also, depending on the type of tax issue, you could be at risk of being prosecuted for a tax crime.

Taxpayers who find themselves in this situation may want to consider the Voluntary Disclosure Programs offered by the IRS and the Georgia Department of Revenue. These programs incentivize taxpayers to proactively disclose their tax liabilities and come into compliance with the law. There are various voluntary disclosure programs available, depending on your issue and exposure.

For those with a civil tax issue (the error was not made with criminal intent), the disclosure program helps taxpayers to resolve their tax and penalty obligations. With the IRS Voluntary Disclosure Program, in exchange for self-disclosing the tax issue before the government learns of the noncompliance, taxpayers who accurately file or amend their last six years of tax returns will typically receive a limited time frame to disclose and pay those previous liabilities. However, this program places heavy emphasis on taxpayer cooperation, and interest is still imposed on amounts due. For the Georgia Department of Revenue Voluntary Disclosure Program, if the taxpayer files or amends their last three years of tax returns, the state will typically waive all penalties, along with the filing requirement for any prior-year tax return beyond the three-year lookback. This is regardless of how long the tax returns have not been filed.

The process differs for individuals with exposure to a criminal tax issue. Those who are interested in the IRS Voluntary Disclosure Program must first submit a detailed request, followed by a series of documents that detail the taxpayer’s noncompliance, an explanation of the circumstances, and also the individual’s entities and assets. The overall disclosure and IRS examination periods may vary. If accepted into the program, the IRS auditors will then determine the applicable taxes, interests, and penalties under the law. Ultimately, the taxpayer could face up to 75% in fraud penalties, plus additional charges or liabilities. As with the civil Voluntary Disclosure Program, it benefits the taxpayer to be proactive and cooperative in this process.

For taxpayers who recently discovered a significant tax issue, or who are concerned about tax noncompliance, the IRS and Georgia Department of Revenue’s Voluntary Disclosure Programs can be an advantageous deal. If you are facing tax, personal, or business debts and need help with your case, please contact Wiggam Law by calling 404-537-5030 or by messaging us through our website. Our experienced tax attorneys help you choose the right strategy to resolve your tax issue and help reduce your criminal tax exposure. We work to develop the solution that works best for you.