The IRS opened a 90-day public comment period to seek input on proposed updates to its Voluntary Disclosure Practice intended to simplify compliance requirements and standardize penalties. The proposal applied nationwide and aimed to encourage noncompliant taxpayers to come forward and correct past violations. Under the proposed framework, conditionally approved participants were required to disclose the most recent six tax years at issue, file amended or delinquent returns and make full payment of tax, penalties and interest within three months.
A uniform penalty structure applied to delinquent returns, amended returns, FBARs and international information returns, with specific penalties for each category. Taxpayers who fully complied were not recommended for criminal prosecution, although the IRS retained discretion to review disclosures and rescind approval for noncompliance. Public comments were accepted through March 22, 2026. If finalized, the revised procedures were expected to take effect six months after publication of the final guidance.
