2026 IRS Offshore Voluntary Disclosure Initiative
Voluntary Offshore Disclosure Law Firm
We help U.S. taxpayers come into compliance with their offshore disclosure violations. Taxpayers may have disclosure obligations under the Bank Secrecy Act (BSA) and the Foreign Account Tax Compliance Act (FATCA), and failure to comply with these obligations can lead to civil or criminal penalties.
Voluntary Disclosure Options for Remedying Offshore Disclosure Violations
For taxpayers who are not in compliance with their offshore disclosure obligations, taking a wait-and-see approach can prove very costly. Once the IRS opens an audit or investigation, the option of making a voluntary disclosure goes off the table. Additionally, if the IRS discovers that a taxpayer has knowingly failed to remedy an offshore disclosure violation, this can substantially increase the risks of scrutiny.
With this in mind, U.S. taxpayers who have not met their offshore disclosure obligations should promptly assess their options for coming into compliance. In this scenario, taxpayers will generally have one of two options available:
The IRS’ Streamlined Filing Compliance Procedures
Taxpayers who have inadvertently failed to meet their offshore disclosure obligations may be eligible to utilize the IRS’ streamlined filing compliance procedures. These procedures are specifically (and exclusively) available to taxpayers who need to remedy non-willful offshore foreign financial asset disclosure violations. In order to qualify to submit a streamlined filing, a taxpayer must:
- Need to resolve a non-willful offshore disclosure violation
- Be prepared to sign a certification of non-willfulness
- Be prepared to pay all amounts owed to the IRS (or seek an installment agreement or appropriate relief)
- Be confident that submitting a streamlined filing will fully resolve their outstanding liability
- Not currently be the subject of an IRS audit or investigation
This last point is particularly important. While submitting a streamlined filing can help resolve taxpayers’ outstanding obligations, it does not preclude the IRS from scrutinizing a taxpayer’s returns. The IRS makes this clear, stating, “returns submitted under the streamlined procedures may be subject to IRS examination, additional civil penalties, and even criminal liability, if appropriate.”
IRS CI’s Voluntary Disclosure Practice
Taxpayers who have willfully failed to meet their offshore disclosure obligations may be able to come into compliance through IRS Criminal Investigation’s (IRS CI) Voluntary Disclosure Practice (VDP). The VDP is a long-standing program available to eligible taxpayers who need to resolve willful tax law violations, though it has changed significantly over the years.
In its current form, the VDP covers offshore disclosure violations and other willful violations of federal law. To participate in the VDP, a taxpayer must:
- Have willfully violated federal law (i.e., the Bank Secrecy Act (BSA) or Foreign Account Tax Compliance Act (FATCA)
- Timely submit all documentation required for VDP participation
- Be prepared to cooperate with the IRS to determine their liability
- Be prepared to pay in full or enter into a full-pay installment agreement
- Not currently be the subject of an IRS audit or investigation
While submitting a voluntary disclosure does not guarantee immunity from further action, “a voluntary disclosure may result in prosecution not being recommended.” If you think that submitting a voluntary disclosure might be your best option, our lawyers can help you make an informed decision and then guide you through the process, if warranted.
Previous Updates
The 2018 IRS Offshore Voluntary Disclosure Initiative has not been the only one of its kind. The 2018 Initiative is the most recent Voluntary Disclosure Program and is similar, in both requirements and assessed penalties, to the 2011 Voluntary Disclosure Program. Taxpayers with undisclosed off shore bank accounts still have the opportunity to make a Voluntary Disclosure today, with the help of a voluntary disclosure lawyer.
Highlights of the 2009 IRS Voluntary Disclosure Program: The IRS collected $3.4 billion from participants to date, which reflects the completion of 95% of cases.
Highlights of the 2011 Amnesty Program: The IRS has collected an addition $1 billion from preliminary payments and continues to process open cases. Many of these participants were at risk of criminal investigation, but were able to avoid the potential for severe civil penalties and criminal investigation by disclosing their off shore bank accounts to a voluntary offshore disclosure law firm.
Terms of the 2018 IRS Offshore Voluntary Disclosure Initiative:
- A 27.5 percent penalty of the undisclosed off shore bank accounts based on the highest total account balances over an eight-year period.
- Taxpayers with undisclosed off shore bank accounts must pay back interest and taxes on any unreported income for up to eight years, as well as delinquency and/or accuracy related penalties.
- Taxpayers with undisclosed off shore bank accounts must file all amended and original tax returns, as well as include payments for taxes, interest, and accuracy related penalties.
Reduce your risk of prosecution or criminal investigation by letting the experienced IRS disclosure lawyers at Thorn Law Group handle the disclosure of your overseas bank accounts.
Please contact Kevin E. Thorn, Managing Partner of the Thorn Law Group at ket@thornlawgroup.com or call (202) 270-7273 to assess your civil and/or criminal exposure.