IRS Criminal Investigation Voluntary Disclosure Practice (VDP)
The IRS Criminal Investigation Voluntary Disclosure Practice (VDP) is a longstanding practice administered by IRS–CI. It gives taxpayers who have willfully failed to comply with tax or tax-related obligations an avenue to come forward, cooperate, and pursue a civil resolution. A voluntary disclosure does not guarantee immunity from prosecution; however, a truthful, timely, and complete disclosure may result in prosecution not being recommended.
The IRS emphasizes that U.S. tax administration rests on “voluntary compliance.” When taxpayers do not voluntarily comply, the IRS may impose civil and criminal sanctions. VDP is designed for situations involving willful noncompliance; if your noncompliance was non-willful, other options (e.g., amended returns, delinquent procedures, or the Streamlined Filing Compliance Procedures) may be more appropriate.
What is a voluntary disclosure?
A voluntary disclosure occurs when a taxpayer provides a truthful, timely, and complete disclosure of willful noncompliance through the IRS’s designated procedures and:
- Timely submits all required documentation (including a Form 2848 for each taxpayer and entity, if represented),
- Cooperates with the IRS in determining correct tax liabilities, and
- Pays in full—or secures a full-pay installment agreement—for tax, interest, and any applicable penalties.
A disclosure is considered timely if it is received before the IRS has (1) commenced a civil examination or criminal investigation, (2) received information from a third party (e.g., an informant, another government agency, a John Doe summons) alerting the IRS to the taxpayer’s noncompliance, or (3) acquired information directly related to the specific noncompliance from a criminal enforcement action (e.g., a search warrant or grand jury subpoena).
Who may disclose (and who may not)
VDP is a compliance option for taxpayers who have committed tax or tax-related crimes and therefore have criminal exposure due to willful violations. It is generally not for taxpayers whose issues were non-willful (error, negligence, or good-faith misunderstanding); those taxpayers should consider alternative remedies. In addition, VDP does not apply to taxpayers with illegal source income (income that is illegal under federal law, even if legal under state law).
How to disclose (current high-level process)
VDP uses a two-part application on IRS Form 14457:
- Part I — Preclearance (eligibility check). Complete Part I of Form 14457 and fax it to IRS–CI at 844-253-5613. If a representative is submitting the VDP, a separate Form 2848 is required for each taxpayer and entity entering the practice. Preclearance determines eligibility but does not guarantee preliminary acceptance.
- Part II — Application (preliminary acceptance). After you receive a preclearance letter, electronically submit Part II within 45 days. If more time is needed, email an extension request to vdp@ci.irs.gov. (Only one 45-day extension may be granted, case-by-case.)
IRS–CI reviews Part II to decide whether you may participate. If approved, CI issues a Preliminary Acceptance letter and forwards the case to the civil side of the IRS for examination. A civil examiner will contact you. You must fully cooperate, including providing records and acknowledging willful noncompliance. Failure to cooperate can result in revocation of preliminary acceptance.
What to expect after preliminary acceptance
- Cases are assigned for civil examination covering multiple years; tax, interest, and civil penalties are determined under applicable law and program guidance.
- In offshore matters, FBAR and other information-return penalties may apply per the civil resolution framework and facts.
- Questions on the status of preclearance or preliminary acceptance may be directed to vdp@ci.irs.gov. After preliminary acceptance, status inquiries may be directed as instructed by CI (e.g., to the designated civil unit).
Voluntary disclosure not for you?
If your situation was non-willful, consider alternatives such as filing amended or past-due returns or using procedures for delinquent information filings. A qualified advisor can help determine the appropriate path based on your facts.
Important reminders
- A voluntary disclosure does not automatically guarantee immunity from prosecution.
- Preclearance is an eligibility screen; it is not an approval to participate.
- Only one 45-day extension for Part II may be granted (upon written request to vdp@ci.irs.gov).
- Illegal source income is not eligible for VDP.
Note: For the latest procedures and the current revision of Form 14457, refer to the IRS website and instructions for Form 14457.