IRVINE, Calif., Aug. 11, 2020 /PRNewswire/ -- In recent years, the IRS has greatly expanded its voluntary disclosure program, where taxpayers who have committed intentional or unintentional violations of the tax code can be brought back into compliance without facing criminal tax charges or the most severe civil penalties. Although the popular offshore voluntary disclosure program (OVDP) for foreign bank and financial accounts has ended, most of its components have been rolled over into the agency's new, comprehensive disclosure program. While this program is an excellent option for many taxpayers who are out of compliance, it does not come without its downsides.
Section 6103(d) of the IRS code allows for disclosure to state agencies of return information shared with the IRS by taxpayers. These disclosures can only be made for state tax administration purposes. This includes state agencies involved in criminal tax enforcement but not agencies involved in non-tax enforcement.
If something in your return suggests that you are involved in the Los Angeles drug trade, the agent will be permitted to contact local, state or federal drug enforcement authorities to find out if they have an open investigation into your activity or any other information that could corroborate their suspicion. The agent cannot disclose specific information about crimes for which the taxpayer is being investigated. However, they can ask questions that might cause the agent or investigator from the other agency to infer something that could lead them to open a separate investigation into your conduct.
The IRS may be compelled to share information to certain federal agencies for non-tax purposes. Return information must be handed over if compelled by an ex parte order of a district judge or federal grand jury investigating you for tax or non-tax crimes. Agents are permitted to disclose information "which may constitute evidence of a violation of any Federal criminal law (not involving tax administration) to the extent necessary to apprise the head of the appropriate Federal agency charged with the responsibility of enforcing such law."
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Public Contact: Dave Klasing Esq. M.S.-Tax CPA, firstname.lastname@example.org
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