Domestic Voluntary Disclosures

Voluntarily Disclosing Domestic Assets

Many people do not realize they must report inheritances and gifts over a certain dollar amount on their tax returns. Underreporting income or over reporting deductions is also a common mistake. When the IRS learns of these assets or income on its own, harsh civil and criminal penalties follow.

If the IRS discovers your domestic assets or income before you voluntarily report them, you could be charged with a 75 percent fraud penalty or criminally prosecuted.

There is a way to disclose these items while avoiding the negative consequences. MillarLaw can help.

The IRS’s Voluntary Disclosure Program is not just for those with offshore assets. Individuals with domestic assets can also use the program to become compliant with the law. The program offers tax amnesty — meaning a recommendation against criminal prosecution and steep civil penalties — for those who qualify.

Key Considerations

There are no guaranteed outcomes when it comes to voluntary disclosure. Like the offshore disclosure program, much depends on the facts and circumstances of your situation. Relevant factors include:

  • Your good faith and willingness to cooperate
  • Whether the disclosure was timely — that is, whether it took place before you received notice of a civil examination or criminal investigation, and before the IRS became aware of the undisclosed assets through other means
  • Whether the disclosure is truthful and complete
  • Whether your failure to comply was willful (i.e., deliberate)
  • Whether any of the assets involved illegal sources of income

Deciding whether to pursue voluntary disclosure — or the related streamlined procedures for nonwillful conduct — requires assessing numerous considerations. Apart from those listed above, there are also important issues relating to the assets themselves.

What types of assets must be disclosed? How are they valued?

These complex factors are best assessed with the guidance of an experienced tax attorney.

Gain Peace Of Mind With Sound Legal Counsel

At MillarLaw, we have helped many taxpayers secure protections through voluntary disclosure. We are well-versed in how the program works. We also provide guidance on state tax compliance through the voluntary disclosure program of the California Franchise Tax Board.

Backed by 40-plus years of tax law experience, our legal team shares a foremost priority to protect clients’ interests through sound legal counsel.

To discuss your situation in detail, call our office at 310-556-3007 or contact us online. Based in Los Angeles, our tax lawyers routinely work with clients from around the world.