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Scan for outdated or missing drivers - takes under a minuteDriver Scan →Repair Windows errors before they cause bigger problemsFix Now →Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →The IRS Voluntary Disclosure Practice (VDP) is for people with potentially willful tax or tax-related noncompliance—not ordinary mistakes—and it does not guarantee immunity from prosecution. Applying can require an admission of willfulness, so the decision is high-stakes and depends on the facts. The IRS has announced proposed changes, but taxpayers should distinguish those proposals from the rules actually in effect and get qualified advice before disclosing.
What the IRS means by “willful”
The IRS describes willfulness as intentional, purposeful, or deliberate conduct. Examples include hiding income or assets or intentionally overstating deductions. An accidental omission or misunderstanding is different; a filing error alone does not establish that conduct was willful.
The IRS directs people concerned about willfulness or possible criminal liability to consult a professional or legal adviser. Do not decide on your own that your conduct qualifies for VDP or make an admission before getting advice based on the facts and records.
Can the IRS prosecute someone who admits underreporting?
Yes. The IRS says a voluntary disclosure does not automatically guarantee immunity from prosecution. A timely, truthful, and complete disclosure may result in the IRS not recommending prosecution, but that is not a promise that prosecution will not occur. The agency’s explanation is on its Criminal Investigation Voluntary Disclosure Practice page.
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The admission is a particular concern because the current process requires the applicant to state willfulness in the application and, after assignment to a civil examiner, provide a statement acknowledging willful failure. The Taxpayer Advocate Service’s 2024 analysis reported that taxpayers and practitioners were concerned about how that statement might be used if an application were denied or acceptance revoked. That report describes a concern; it does not establish that the statement is used that way in every case.
The same Taxpayer Advocate Service report counted 161 criminal VDP cases completed from the beginning of fiscal year 2019 through August 31, 2024. That is a historical count through the stated date, not an annual rate or a guide to an individual applicant’s likelihood of prosecution. See Most Serious Problem #10.
How current VDP, the proposal, and non-willful corrections differ
| Route | Conduct and timing | Admission or filing | Penalties and payment | Protection from prosecution |
|---|---|---|---|---|
| Current VDP | For potentially willful noncompliance; disclosure must precede specified IRS examination, investigation, third-party information, or enforcement triggers. | Two-part application; willfulness must be stated, and the process includes a later statement acknowledging willful failure. | Current guidance calls for payment in full or a full-pay installment agreement for tax, interest, and applicable penalties. | No automatic immunity; a disclosure may result in prosecution not being recommended. |
| Announced VDP proposal | Proposes a generally six-year disclosure period. | Proposes filing applicable amended or delinquent returns and reports, with required agreements. | Proposes full payment of tax, penalties, and interest within three months after conditional approval, with specified penalty terms. | The announcement does not establish guaranteed immunity. |
| Non-willful correction routes | For errors or misunderstandings, rather than deliberate noncompliance; streamlined procedures may be available for qualifying non-willful offshore cases. | May involve amended or past-due returns; offshore eligibility depends on the IRS streamlined rules. | Terms depend on the correction route and circumstances; the cited IRS pages do not set one general payment rule for all non-willful corrections. | These routes are not the criminal VDP. |
What happens under the current VDP process
The IRS describes the current application as a two-part electronic process. Preclearance is not acceptance into the practice.
- Request preclearance: Submit Part I of Form 14457 using the method and current instructions on the IRS VDP page.
- Submit the full application if invited: After receiving a preclearance letter, submit Part II electronically within 45 days, as current IRS guidance directs. Confirm the current form and instructions before filing.
- Proceed through review: If the application is approved at this stage, IRS Criminal Investigation sends a Preliminary Acceptance Letter and forwards the matter to a civil section. This is not the same as a guarantee against prosecution.
- Cooperate and provide required materials: The taxpayer must provide required documents and, after assignment to a civil examiner, a statement acknowledging willful failure.
- Resolve the civil liability under current terms: Current guidance requires payment in full or a full-pay installment agreement for tax, interest, and applicable penalties.
Timeliness is essential: current IRS guidance says a disclosure is not timely once specified examination, investigation, third-party information, or enforcement events have occurred. The IRS also requires a truthful, complete disclosure and cooperation. A tax professional can assess whether a particular trigger may already apply; do not rely on a general description to determine eligibility.
What the proposed revisions would change
On December 22, 2025, the IRS announced proposed revisions and opened a 90-day public-comment period that ended March 22, 2026. The announcement describes a proposed generally six-year disclosure period and a proposed requirement to file applicable amended or delinquent returns and reports and pay tax, penalties, and interest in full within three months after conditional approval.
The proposed penalty terms include failure-to-file penalties for delinquent returns without failure-to-pay penalties; a 20% accuracy-related penalty for each year of amended returns; annual penalties for FBARs; and penalties of up to $10,000 per international information return, per year. These are proposal details, not terms to treat as currently operative based on the announcement. The IRS says the proposed process would take effect six months after publication of final terms if finalized. Read the IRS announcement and check the live VDP page for final terms, an effective date, and any transition rules before acting. The IRS says eligibility under a revised practice will be determined under procedures in effect when changes are finalized; the proposal itself creates no rights or expectations before finalization and implementation.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.Should you amend a return or apply for VDP?
That choice turns first on whether the facts suggest deliberate conduct, not simply on the amount of tax due. Amended or past-due returns are among the IRS-identified alternatives for non-willful errors. For qualifying non-willful offshore reporting failures, the IRS has separate Streamlined Filing Compliance Procedures. Those procedures have their own eligibility rules and are not a substitute for VDP when conduct may have been willful.
- If the issue may be an error or misunderstanding: Ask a qualified tax professional which correction route fits before making a willfulness representation.
- If conduct may have been deliberate: Seek advice from a tax attorney or another qualified professional experienced in IRS voluntary disclosures before contacting the IRS about the underlying facts.
- If the IRS has already contacted you or received relevant information: Get advice promptly about whether a timeliness trigger has occurred.
What if you cannot pay the full amount?
Under the current VDP description, the IRS requires either full payment or a full-pay installment agreement for tax, interest, and applicable penalties. A full-pay installment agreement is not the same as an agreement that leaves part of the assessed amount unpaid. The announced proposal instead calls for full payment within three months after conditional approval. Do not assume the proposed payment deadline applies to a current case—or that current payment terms will remain unchanged if final revisions take effect. Have an adviser review the applicable rules and your ability to pay before choosing a route.
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