Proposed Voluntary Disclosure Revisions Initiate 90-Day Comment Period

The Internal Revenue Service has opened a 90-day public comment period, ending March 22, 2026, on proposed revisions to its Voluntary Disclosure Practice. The proposal outlines updated compliance and disclosure requirements for taxpayers seeking to come forward voluntarily with previously undisclosed tax matters. Under the suggested framework, taxpayers who receive conditional approval must file amended or delinquent returns, including international reports where applicable, pay all taxes, penalties, and interest within a defined period, and complete required agreements. Comments may be submitted by email to the IRS at vdp@ci.irs.gov and will be considered before any final rules are issued.

The proposed penalty framework aims to clarify assessments by applying specific penalties for failure to file or accuracy issues across all relevant years within the disclosure period. International information return penalties and FBAR penalties would be subject to inflation adjustments. The IRS anticipates that fully compliant taxpayers under this updated regime will not be recommended for criminal prosecution, subject to the conditions of acceptance and full adherence to the VDP’s terms.

Continue reading...