An official website of the U.S. GovThe IRS should reform its Criminal Voluntary Disclosure Practice to restore accessibility and effectiveness, enabling taxpayers to self-correct compliance failures while supporting revenue collection and voluntary compliance.
To restore the effectiveness and integrity of the Criminal VDP, TAS recommends the IRS:
Quarter 1 Updates
TAS is reviewing how to incorporate this initiative into an existing or new Collaborative Team, a Systemic Advocacy Project, or a potential FY 2025 Annual Report to Congress Most Serious Problem. Progress during this period was affected by the lapse in appropriations and related operational impacts, including reduced staffing capacity, reassignment of work and priorities, and a reevaluation of TAS’s approach to managing systemic advocacy objectives and associated initiatives.
Quarter 2 Updates
The IRS conducted a comprehensive review of the Voluntary Disclosure Practice (VDP) with stakeholder input to evaluate whether the program effectively promotes compliance among taxpayers with potential criminal liability. The IRS also indicated it is considering adjustments related to income derived from marijuana sales. TAS will continue to monitor and advocate for continued stakeholder engagement, changes that improve accessibility and changes that reduce administrative barriers to VDP participation.
Quarter 1 Updates
TAS is reviewing how to incorporate this initiative into an existing or new Collaborative Team, a Systemic Advocacy Project, or a potential FY 2025 Annual Report to Congress Most Serious Problem. Progress during this period was affected by the lapse in appropriations and related operational impacts, including reduced staffing capacity, reassignment of work and priorities, and a reevaluation of TAS’s approach to managing systemic advocacy objectives and associated initiatives.
Quarter 2 Updates
Since the beginning of FY26, the IRS has taken steps toward simplifying the Voluntary Disclosure Practice (VDP) application process. Most notably, the IRS removed the “willfulness” checkbox from Form 14457, addressing a longstanding concern that the requirement may have discouraged participation and created confusion for taxpayers seeking to come into compliance. The IRS has also sought public comment on additional proposed reforms, including electronic submission of Form 14457, standardized procedures, and clearer processing requirements designed to improve transparency and consistency throughout the program.
While these actions represent progress toward a more user-friendly VDP, the proposed changes have not yet been finalized or fully implemented. TAS will continue to monitor the IRS’s efforts to simplify the application process and identify opportunities to improve taxpayer understanding, participation, and voluntary compliance.
