IRS Voluntary Disclosure Program

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Introduction to the IRS Voluntary Disclosure Program

Taxpayers who have unreported income or undisclosed foreign or domestic accounts often live with the constant fear of IRS action. The Internal Revenue Service offers a legal path to come forward and correct past mistakes through the IRS Voluntary Disclosure Practice. This program allows taxpayers to disclose their tax noncompliance, pay what is owed, and avoid potential criminal prosecution.

At The Law Offices of Nick Nemeth, we have helped thousands of clients in Dallas, Fort Worth, and Frisco successfully navigate complex IRS programs. Our team of experienced tax attorneys ensures that your disclosure is handled with care, confidentiality, and the strategic planning necessary to minimize penalties while protecting your rights.

What is the IRS Voluntary Disclosure Program?

The IRS Voluntary Disclosure Practice (VDP) is a program designed for taxpayers who have willfully failed to report income, foreign assets, or other taxable activities. By entering this program, you proactively admit noncompliance before the IRS discovers it. In exchange, the IRS may reduce penalties and, most importantly, refrain from pursuing criminal charges.

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This program is not the same as simple amendments or audits. It is specifically intended for cases involving potential criminal exposure due to deliberate tax violations, such as:

Failure to report foreign bank accounts or offshore income.
Concealment of domestic income from self-employment, business, or investments.
Non-reporting of cryptocurrency or digital asset gains.
Intentional underreporting of taxable income.

Benefits of the IRS Voluntary Disclosure Program

The IRS Voluntary Disclosure Program option offers significant benefits compared to waiting for the IRS to uncover your noncompliance:

Protection from Criminal Prosecution: The primary advantage is avoiding criminal tax charges.
Reduction in Civil Penalties: While some penalties may still apply, they are often lower than those imposed after detection.
Resolution of Outstanding Liabilities: Allows you to clear past tax problems and achieve compliance moving forward.
Peace of Mind: Eliminates the fear of IRS investigation and potential criminal charges.

Choosing voluntary disclosure demonstrates good faith and cooperation, which the IRS often considers when determining penalties.

Voluntary Disclosure vs. Voluntary Compliance

Taxpayers often confuse voluntary tax disclosure with voluntary compliance.

Voluntary Disclosure Program: Formal admission of willful noncompliance, typically where criminal charges could apply.
Voluntary Compliance: General term describing a taxpayer’s responsibility to file accurate returns and pay taxes timely.

While voluntary compliance is ongoing, the IRS voluntary disclosure process is a specialized program for those who need to rectify serious past violations. Understanding the distinction is critical, and our attorneys can help determine which path is appropriate for your situation.

Steps in the IRS Voluntary Disclosure Process

Entering the program involves careful planning and execution. The process typically includes:

Preliminary Evaluation: Our attorneys assess whether you qualify for the voluntary disclosure program and evaluate potential exposure.
Initial Submission: We submit a pre-clearance request to the IRS Criminal Investigation division to confirm eligibility.
Formal Application: A detailed voluntary disclosure package is prepared, including amended or delinquent returns and full disclosure of income and assets.
Payment and Penalties: Payment arrangements are made for taxes, interest, and penalties. In some cases, negotiations may reduce overall liabilities.
Closing Agreement: The IRS issues a final agreement confirming resolution and ensuring no further criminal investigation on the disclosed matters.

This process requires precise documentation, strategic negotiation, and legal expertise to achieve the best outcome.

Why Timing Matters

The IRS Voluntary Disclosure Program is only available if you come forward before the IRS initiates an investigation. If the IRS discovers your noncompliance first, you lose the option to participate and could face full penalties and criminal charges.

This is why immediate action is critical. If you are considering disclosure, contact an attorney before the IRS reaches out. The sooner you begin, the greater the chance of securing a favourable resolution.

Risks of Going It Alone

Attempting voluntary disclosure without legal guidance can be risky. A poorly prepared submission may:

Inadvertently admit wrongdoing without securing protection from prosecution.
Trigger additional IRS scrutiny due to incomplete disclosures.
Lead to higher penalties if errors are found in the disclosure package.

Our attorneys in Dallas, Fort Worth, and Frisco have years of experience handling sensitive disclosures. We ensure that every aspect of your case is carefully reviewed and presented to the IRS to minimize risk.

How We Help Clients in
Dallas, Fort Worth, and Frisco

The Law Offices of Nick Nemeth serves clients throughout the Dallas–Fort Worth metroplex, including Frisco, offering personalized strategies for disclosure cases.

Dallas: Our Dallas office regularly assists professionals, business owners, and individuals with complex undisclosed income matters.
Fort Worth: In Fort Worth, we provide defence strategies for clients facing IRS collection actions or criminal investigation risks.
Frisco: For Frisco residents, we offer proactive planning and confidential consultations to handle disclosures before problems escalate.

No matter where you are located in the DFW area, our firm provides local, hands-on support backed by more than 25 years of tax law experience.

Common Scenarios Where Disclosure Is Needed

Foreign Bank Accounts: Undisclosed offshore accounts can lead to significant penalties under FBAR and FATCA rules.
Cryptocurrency Gains: Many taxpayers mistakenly assume digital transactions are anonymous. The IRS has aggressively pursued crypto-related noncompliance.
Unfiled Returns: Years of unfiled tax returns present both civil and criminal risks if left unresolved.
Underreported Income: Business owners, contractors, and professionals who consistently underreport income may face severe consequences.

In each case, the IRS Voluntary Disclosure Program route offers a chance to fix issues before they escalate.

Why Choose The Law Offices of Nick Nemeth

When facing IRS matters, experience and dedication matter most. Our firm has:

25+ years of tax resolution experience.
A proven track record of guiding more than 5,000 clients through IRS programs.
Recognition in national and local awards, reflecting our commitment to excellence.
Personalized service tailored to your specific situation, whether in Dallas, Fort Worth, or Frisco.

We understand the stress of dealing with the IRS and are committed to protecting your financial future through skilled negotiation and legal defence.

Take Control Through IRS Voluntary Disclosure

Living with the fear of IRS discovery is overwhelming, but you do not have to face it alone. By entering the IRS Voluntary Disclosure Program, you can regain control, resolve past mistakes, and secure peace of mind.

At The Law Offices of Nick Nemeth, our team provides the knowledge, experience, and dedication needed to successfully navigate this complex process. Serving clients in Dallas, Fort Worth, and Frisco, we are here to guide you from disclosure to resolution with confidence and confidentiality.

Frequently Asked Questions

Who should consider the IRS Voluntary Disclosure Program?

Taxpayers who willfully failed to report income or assets, including foreign accounts or crypto, should consider the IRS Voluntary Disclosure Program. It is designed for cases with potential criminal exposure.

Is the IRS Voluntary Disclosure Program the same as voluntary compliance?

No. Voluntary compliance is the general duty to file and pay taxes accurately. The IRS Voluntary Disclosure Practice is a formal path for willful noncompliance where criminal charges could apply.

Can I use the IRS Voluntary Disclosure Program if the IRS has already started an examination or investigation?

No. You must come forward before the IRS begins an examination or investigation.

What are the main benefits of entering the program?

The key benefit is protection from criminal prosecution on the disclosed issues. You also gain a structured path to resolve back taxes, interest, and reduced civil penalties. Penalties are case dependent and are often lower than if the IRS finds the issues first.

What information will I need to provide in a voluntary tax disclosure?

You must fully disclose income, assets, accounts, and entities, and provide amended or delinquent returns. Complete and truthful disclosure is required.

How many years of returns are involved in an IRS voluntary disclosure?

It varies by case. The IRS sets the correction period, often covering several prior years.

Will I still owe penalties and interest under the IRS Voluntary Disclosure Program?

Yes. You will owe back taxes, interest, and civil penalties. Entering the program often results in lower penalties than if the IRS finds the issues first.

Does the IRS voluntary disclosure cover foreign accounts and cryptocurrency?

Yes. The practice applies to undisclosed offshore accounts, FATCA and FBAR issues, and crypto gains that were not reported.

What are the main steps in the IRS voluntary disclosure process?

Your attorney evaluates eligibility, secures preclearance with IRS Criminal Investigation, prepares the disclosure package, arranges payment, and finalizes a closing agreement. Proper documentation and strategy are essential.

Do you help clients in Dallas, Fort Worth, and Frisco with the IRS Voluntary Disclosure Program?

Yes. The Law Offices of Nick Nemeth serves clients across Dallas, Fort Worth, and Frisco with confidential consultations and end to end representation.

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Proud to have received
“IRS Tax Lawyer of The Year, USA"
at FM Taxation Awards 2024

We are proud to announce that Nick Nemeth, the founder and driving force at The Law Offices of Nick Nemeth, has been recognized as the "IRS Tax Lawyer of The Year" in the USA, by the prestigious FM Taxation Awards, validating his unwavering commitment to providing exceptional IRS tax representation and advocacy.

Whether dealing with IRS audits, tax liens, wage garnishments, or other tax controversies, our firm is dedicated to protecting your rights and helping you achieve the best possible outcome.

We are honored by this recognition and remain committed to delivering the highest standards of legal service for all your tax-related needs.