What is the IRS disclosure program like?
Orlando CPA Paulette Smith explains what the IRS disclosure process is like.
“I have handled several voluntary offshore disclosure cases. The cases are initiated by, first of all, contacting the IRS with specific information saying, ‘This is a taxpayer who wants to make a voluntary disclosure.’ The IRS will then, within a matter of days, re-contact you and say, ‘Yes, you may come into the program,’ or, ‘You may not.’
The reason IRS would say no is because of an investigation has already been initiated. Once an investigation has started, it’s too late to voluntarily disclose.
Once a person or business is in the Voluntary Disclosure Program, then it’s a matter of collecting the information that we need in order to prepare amended returns and the appropriate information returns as well, to disclose all of the information that should have been disclosed in the first place.
That is put in the form of an amended return, submitted to the IRS, and then, typically, there’s a dialogue. There is a dialogue between me and/or the attorney as representatives of the taxpayer and the IRS. There are always questions that are asked: ‘Where did you get this information?’ ‘What conversion rates did you use?’ There are any number of technical and other logical questions that will come up.
Because I’ve done several of these in the past and have the experience with preparing the disclosure and dealing with the IRS, I think that brings an invaluable tool to the table when a voluntary disclosure is being contemplated.”