What to Know About the IRS’ Proposed Changes to the Voluntary Disclosure Program (VDP) in 2026

The IRS’ Voluntary Disclosure Program (VDP) provides a way for eligible U.S. taxpayers to resolve willful tax law violations without facing criminal charges. Pending changes to the VDP could impact some taxpayers’ decisions regarding whether to file under the VDP going forward. Learn more from Maryland criminal tax lawyer Kevin E. Thorn, Managing Partner of U.S. International Tax Advisors:

What Changes is the IRS Proposing to the Voluntary Disclosure Program (VDP) in 2026?

The IRS is proposing several changes to the Voluntary Disclosure Program (VDP) in 2026. Some of the key proposals include:

New Filing Requirements

When applying to participate in the VDP, taxpayers would be required to: (i) “identify all years of noncompliance and provide a full and accurate description of the taxpayer’s willful noncompliance;” (ii) submit a signed closing agreement waiving the applicable statute(s) of limitations; (iii) agree to pay applicable accuracy-related penalties; and, (iv) sign an FBAR agreement, if applicable.

New Deadline for Additional Filings and Payment

Taxpayers who are “precleared” to participate in the VDP would be required to do all of the following within three months of receiving preclearance from the IRS: (i) file all required amended or delinquent income tax returns, international information tax returns (i.e., IRS Form 8938), and FBARs; (ii) pay all applicable taxes, interest and penalties “in full;” and, (iii) sign a settlement agreement with the IRS finalizing the terms of their resolution through the VDP.

Specified Penalties for VDP Resolution

When resolving willful tax law violations through the VDP, taxpayers would be required to pay failure-to-file penalties for delinquent returns, accuracy-related penalties for amended returns, statutory FBAR penalties, and penalties of up to $10,000 per return, per year for delinquent and amended international information returns.

When Will the Proposed Changes Take Effect?

The IRS’ proposed changes to the VDP are subject to public comment through March 22, 2026. As the IRS explains, “[i]f finalized, the revised procedures are expected to take effect six months after publication of the final terms.” This means that they could take effect before the end of the year.

What Should You Do if You Need to Resolve a Willful Tax Law Violation?

If you need to resolve a willful tax law violation with the IRS, you should consult with an experienced criminal tax lawyer about submitting a voluntary disclosure under the VDP. Under the current terms of the program, strict eligibility criteria apply, and while submitting a voluntary disclosure can lead to a settlement with the IRS, immunity from criminal prosecution is not guaranteed. An experienced criminal tax lawyer will be able to help you make an informed decision about whether to file and then work with the IRS on your behalf as warranted.

Request a Confidential Consultation with Maryland Criminal Tax Lawyer Kevin E. Thorn

If you would like more information about filing under the IRS’ Voluntary Disclosure Program (VDP) in 2026, we invite you to get in touch. Call 240-235-5096 or contact us online to request a confidential consultation with Maryland criminal tax lawyer Kevin E. Thorn, Managing Partner of U.S. International Tax Advisors.