How Does the IRS Criminal Investigation Voluntary Disclosure Process Work?

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Even though the IRS is known for its diligence in tracking down those who defraud the agency, there are always some cases that slip through the cracks. Further, it can sometimes take many years after the tax fraud is perpetrated for the IRS to discover what occurred and seek out the taxpayer for reimbursement as well as potential civil fines and criminal charges if their actions were willful. The IRS’s criminal investigation voluntary disclosure process allows for those who have committed past tax crimes or made willful errors on old returns to get back into compliance without facing criminal prosecution and simultaneously limiting your civil penalty exposure. The catch is, you must voluntarily come forward and admit what you have done before the IRS catches on and begins an audit or criminal tax investigation into your behavior. At the Tax Law Offices of David W. Klasing, our skilled dual licensed Tax Lawyers and CPAs have years of experience successfully guiding clients through the voluntary disclosure process, and we can work to do the same for you. We have never had a client that made a voluntary disclosure face prosecution for a tax crime.

Who is Eligible for the IRS Criminal Investigation Voluntary Disclosure Program?

The voluntary disclosure program is open to everyone who had made willful or non-willful errors in past tax filings (or failures to file) and wishes to come forward, admit to the IRS what they did, and work with the agency to correct the issue and pay the taxes owed and any civil penalties assessed. However, those who have committed non-willful errors or innocent mistakes are often better off trying to amend the returns or going through a foreign or domestic streamlined disclosure program, as they will almost always be assessed much smaller civil fines for their behavior if they go through those channels. If your actions were willful and could expose you to potential criminal liability, on the other hand, you will want to go through the voluntary disclosure program. The only major barrier to entry is the one mentioned in the opening paragraph above: if the IRS is already onto your tax crimes and has opened up an audit or criminal tax investigation into your behavior, it is usually too late, and the IRS will reject your application.

How Do I Apply for the IRS Criminal Voluntary Disclosure Program?

Before going forward with an application for the voluntary disclosure program, you should always contact an experienced dual licensed Tax Attorney and CPA like those at the Tax Law Offices of David W. Klasing so that we can review your situation and be sure that you are making the correct decision and not opening yourself up to more liability than you have to. Once we have presented you with all the facts to make an informed decision, if you choose to go forward with the voluntary disclosure process, we can help you gather and reconstruct the necessary books and records, fill out and submit the required documents, and protect your rights as we guide you through the process to a successful resolution.

The IRS describes the actual process as two-parted. First, you must fill out Part I of Form 14457, Voluntary Disclosure Practice Preclearance Request and Application to request preclearance. Preclearance determines your eligibility for the program but does not guarantee preliminary acceptance. Once this form has been submitted and received by the IRS, your Tax Attorney can reach out to the agency to get a feel for how they see your application and how long and involved the process might become. If the agency believes that you qualify and there is no open criminal tax investigation, audit or examination into the conduct you disclosed, they will grant preliminary approval, after which you will be asked to fill out Part II of the Preclearance Request and Application.

The office of criminal investigations will again review your submission and make a final determination about whether or not you can be accepted into the program. If you are approved, you will be sent a preliminary acceptance letter stating that your matter is being transferred from CI to a civil section of the IRS. You will then be contacted by an IRS examiner who will work with you through the rest of the process. A veteran Voluntary Disclosure Attorney like those at the Tax Law Offices of David W. Klasing will be able to work with the examiner to minimize your civil damages and get you the best possible deal for repayment of the back taxes and the civil fines that will likely be assessed. Once you have completed the program and paid what you owe, you will be free from the threat of criminal tax prosecution for the criminal tax fraud that you disclosed. However, the IRS is likely to keep a close eye on you for a while, meaning you must work to ensure that your returns are complete and accurate and that you do not expose yourself to further liability and a situation where the IRS is likely to be much less forgiving.

If You Believe You Could Benefit from the IRS Criminal Investigation Voluntary Disclosure Process, Contact Our Skilled Tax Attorneys Today

For many people who have committed willful attempts to defraud the IRS in the past, but wish to live without the threat of criminal tax prosecution hanging over them, the criminal investigation voluntary disclosure program is a great way to get back into compliance with a near-guaranteed pass on criminal prosecution. However, the program is not for everyone, and could even be harmful in some cases. For this reason and others, it is imperative to contact a Veteran Domestic and Offshore Voluntary Disclosure Tax Attorney like those at the Tax Law Offices of David W. Klasing before you choose to submit an application. We can review your situation, and if we believe voluntary disclosure could be beneficial to you, we will help guide you through the process in a way that minimizes any damage already caused and protects you from unfair treatment. Call us today at (661) 432-1480 to set up a consultation.

We Are Here for You

Regardless of your business or estate needs, the professionals at the Tax Law Offices of David W. Klasing are here for you. We are open for business and our team will help ensure that your business is too. Contact the Law Offices of David W. Klasing today to discuss your business with one of our professionals.

In addition to our main office in Irvine, the Tax Law Offices of David W. Klasing has unstaffed (conference room only) satellite offices in Los Angeles, San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland, Carlsbad and Sacramento. During the COVID-19 pandemic, our staff are working from home, but have full virtual meeting capability.

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Note: As long as a taxpayer that has willfully committed tax crimes (potentially including non-filed returns coupled with affirmative evasion of payment) self-reports the tax fraud (including a pattern of non-filed returns) through a domestic or offshore voluntary disclosure before the IRS has started an audit or criminal tax investigation / prosecution, the taxpayer can ordinarily be successfully brought back into tax compliance and receive a nearly guaranteed pass on criminal tax prosecution and simultaneously often receive a break on the civil penalties that would otherwise apply.

It is imperative that you hire an experienced and reputable criminal tax defense attorney to take you through the voluntary disclosure process. Only an Attorney has the Attorney Client Privilege and Work Product Privileges that will prevent the very professional that you hire from being potentially being forced to become a witness against you, especially where they prepared the returns that need to be amended, in a subsequent criminal tax audit, investigation or prosecution.

Moreover, only an Attorney can enter you into a voluntary disclosure without engaging in the unauthorized practice of law (a crime in itself). Only an Attorney trained in Criminal Tax Defense fully understands the risks and rewards involved in voluntary disclosures and how to protect you if you do not qualify for a voluntary disclosure.

As uniquely qualified and extensively experienced Criminal Tax Defense Tax Attorneys, Kovel CPAs and EAs, our firm provides a one stop shop to efficiently achieve the optimal and predictable results that simultaneously protect your liberty and your net worth. See our Testimonials to see what our clients have to say about us!