IRS Streamlined Voluntary Disclosure Programs: What Taxpayers Need to Know in 2026

For U.S. taxpayers who are behind on their federal filings, proactively coming into compliance is generally the best approach. Taking a wait-and-see approach can be risky, as not only can this lead to a high-stakes audit, but knowingly ignoring past filing errors can have criminal implications as well. Coming into compliance generally involves utilizing one of the IRS’ streamlined voluntary disclosure programs. Learn more from Boston international tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group.

Streamlined Filing Compliance Procedures vs. Voluntary Disclosure Practice

For 2026, the IRS has two streamlined voluntary disclosure programs. Both of these programs allow eligible taxpayers to come forward and voluntarily resolve past filing mistakes without triggering a civil tax audit or criminal tax investigation.

But, beyond this, the IRS’ two streamlined voluntary disclosure programs are very different. Here is a brief introduction to when taxpayers can use each of these programs and the procedures involved:

IRS Streamlined Filing Compliance Procedures

The IRS’ streamlined filing compliance procedures provide a way for taxpayers to voluntarily resolve issues related to the obligation to report foreign financial assets under the Bank Secrecy Act (BSA) and Foreign Account Tax Compliance Act (FATCA). Under the BSA and FATCA, U.S. taxpayers must report qualifying offshore bank accounts and other foreign financial assets to the federal government annually.

Taxpayers can use the IRS’ streamlined filing compliance procedures to resolve non-willful violations. Taxpayers must certify that their non-compliance was non-willful, and submitting a false certification can lead to additional exposure.

When submitting a streamlined filing, taxpayers must generally be prepared to pay what they owe—including all applicable penalties. The IRS processes streamlined filings, “like any other return submitted to the IRS;” and, while taxpayers can use streamlined filings to come into compliance, “the streamlined filing process will not culminate in the signing of a closing agreement with the IRS.”

IRS CI Voluntary Disclosure Practice

IRS CI’s Voluntary Disclosure Practice (VDP) provides a means for taxpayers to proactively resolve willful tax law violations. This includes, but is not limited to, violations of the BSA and FATCA.

Willful tax law violations carry the potential for criminal penalties, and IRS CI works with the DOJ to pursue criminal charges when warranted. Under IRS CI’s Voluntary Disclosure Practice, “[a] voluntary disclosure will not automatically guarantee immunity from prosecution; however, a voluntary disclosure may result in prosecution not being recommended.”

When submitting voluntary disclosures, taxpayers must be prepared to either pay what they owe or enter into a full-pay installment agreement with the IRS. Filing under the VDP is a multi-step process, and taxpayers must obtain “preclearance” from the IRS CI before proceeding.

Schedule a Consultation with Boston International Tax Attorney Kevin E. Thorn

If you need to know more about your options for proactively resolving a federal tax issue in 2026, we invite you to get in touch. Call 617-692-2989 or tell us how we can reach you online to schedule a consultation with Boston international tax attorney Kevin E. Thorn, Managing Partner of Thorn Law Group.