Reply To: Voluntary Disclosure Agreements

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Eric Green

Yes I can. But I use voluntary disclosure in three situations:
1. Someone who has not filed for several or more years – 7203 makes it a crime to willingly fail to file a tax return. This is not prosecuted often, but I think it would be malpractice for me to not consider it, and by getting in a pre-clearance request I get our foot in the door asap and can then get the returns done and in
2. If a client has been committing fraud or filing questionable returns we want to amend. I do not know what is going on behind the scenes at the IRS, so again this allows us to get in quickly with the pre-clearance and avoid any criminal referral
3. We have no records. By doing Voluntary Disclosure we can explain that: for instance my client has been paying everyone cash under the table, perhaps undocumented workers, and has no records and no proof. If we simply filed returns with our best guess and get audited we have a mess on our hands, possible fraud and immigration violations, and no records. We can disclose and deal with that much better through a VD where the IRS knows, and even if they audit and we have to argue about the numbers, I know criminal referral is off the table.