Tax Blog

For more than three-quarters of a century, the IRS has had some form of a Voluntary Disclosure Program.  These programs have invited non-compliant taxpayers who have willfully cheated the government to make amends and come back into compliance.  In return, the taxpayer benefits from reduced penalties and non-prosecution in return for self-reporting.  On August 25, 2026, the IRS Criminal Investigation Chief announced that the IRS would release within the next 60 days a new version of the Voluntary Disclosure Program.  That announcement has been long awaited and sorely needed.

The current version of the VDP has been cumbersome, punitive, and administered so restrictively that it has become uninviting.  In December of 2025, in recognition that the program has not been successful in attracting very many applicants, the IRS proposed various changes to the VDP and solicited comments from the public.  Many thoughtful and constructive comments were submitted by bar associations and law firms, including our firm.

Now, the Service is close to unveiling the new program.  Here’s hoping that it strikes the right balance of assuring non-prosecution, offering reduced penalties, and providing prompt resolution.  We have been promised that taxpayers will no longer have to admit willfulness in order to apply, that digital asset non-compliance will be covered, and that the disclosure process will be designed to allow completion within 120 days.  The devil is in the details, and we’ll have those details soon.