IRS Seeks Public Comment on Proposed Changes to Voluntary Disclosure Program (VDP) in 2026
Posted in Offshore Account Update on January 30, 2026 | Share
The Internal Revenue Service is seeking public comment on proposed changes to its Voluntary Disclosure Program (VDP). This is a standard part of the federal rulemaking process, and after considering public comments, the IRS can finalize the proposed changes and implement them. According to a recent press release, the IRS plans to implement its proposed changes within 6 months of finalization, which could take effect before the end of 2026. Learn more from Washington D.C. tax evasion attorney Kevin E. Thorn, Managing Partner of Thorn Law Group:
IRS Proposal Would Make Some Significant Changes to the VDP
The Voluntary Disclosure Program (VDP) allows U.S. taxpayers to proactively resolve willful tax law violations. Willful violations of the Internal Revenue Code, the Foreign Account Tax Compliance Act (FATCA), and other pertinent federal statutes can expose taxpayers to criminal charges, and submitting a voluntary disclosure offers an opportunity to come into compliance without facing prosecution by the U.S. Department of Justice (DOJ).
The IRS’ proposal would make some significant changes to the VDP.
Currently, the VDP is subject to strict eligibility criteria, and taxpayers participating in the program must meet several requirements to resolve their federal tax controversies without facing criminal charges. The IRS is proposing to add more requirements for successful participation in the VDP, shorten the VDP process timeline, and clarify the penalties taxpayers must pay to avoid criminal prosecution. Some of the key proposed changes include:
- Requiring taxpayers to “identify all years of noncompliance and provide a full and accurate description of the taxpayer’s willful noncompliance” in their initial VDP filings.
- Requiring taxpayers to waive all applicable statutes of limitations, agree to pay accuracy-related penalties, and sign an FBAR agreement (if applicable) in order to participate in the VDP.
- Requiring taxpayers to file all necessary amended or delinquent returns and FBARs and pay all applicable taxes, penalties and interest “in full” within three months of being conditionally approved to participate in the VDP.
- Requiring taxpayers to sign all “required agreements” to finalize their participation in the VDP within three months of being conditionally approved.
The IRS’ proposed changes to the VDP also seek to clarify the penalties that taxpayers must pay when seeking to avoid criminal prosecution through the VDP. These would include: (i) failure-to-file penalties for delinquent returns; (ii) accuracy-related penalties for amended returns; (iii) statutory penalties for delinquent and amended FBARs; and (iv) penalties of $10,000 per return, per year for delinquent and amended international information returns.
Contact Washington D.C. Tax Evasion Attorney Kevin E. Thorn
If you need to know more about the IRS’ Voluntary Disclosure Program (VDP) for resolving willful tax law violations, we invite you to get in touch. To request a confidential consultation with Washington D.C. tax evasion attorney Kevin E. Thorn, Managing Partner of Thorn Law Group, please call 202-349-4033 or inquire online today.
