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Voluntary Disclosures

Kostelanetz has represented thousands of clients who have made voluntary disclosures to the IRS and state taxing authorities. Voluntary disclosures can be an effective way for taxpayers to limit their criminal and civil liability for past tax noncompliance, including failure to file tax returns or international forms, filing false or fraudulent tax returns or forms, and other tax and reporting violations.

In November 2018, the IRS announced new guidance expanding on the traditional voluntary disclosure practice that guided IRS employees, practitioners, and taxpayers for more than 50 years. This new guidance, supplemented by the issuance of additional instructions in April 2020, now governs all foreign and domestic voluntary disclosures.

Kostelanetz attorneys are well-acquainted with the IRS’s traditional disclosure practice, the former Offshore Voluntary Disclosure Program, the new guidance announced in 2018, and all recent developments. The firm has also represented thousands of taxpayers coming into compliance under alternative paths, including the Streamlined Filing Procedures, FBAR Submission Procedures, Delinquent International Information Return Submission Procedures, Qualified Amended Returns, and simply filing amended returns pursuant to the IRS compliance policy statements. With respect to state and local tax matters, our attorneys represent clients with respect to voluntary disclosures involving state income, sales and use, admissions and amusement, withholding and payroll, franchise, and excise tax through individual state disclosure programs, often collaborating with local counsel and accounting firms to capitalize on existing working relationships.

Audits involving complex domestic and international issues, including foreign trusts, foundations, corporations, and nominees often follow a taxpayer’s efforts to address noncompliance. We have extensive experience navigating these sensitive issues and minimizing the overall taxes, penalties, and interest charged.

Kostelanetz frequently represents fiduciaries, personal representatives, and executors of deceased or incapacitated taxpayers facing years of noncompliance with tax and reporting obligations. The related liabilities for taxes and penalties can prevent representatives from distributing funds from a trust, conservatorship, or estate without exposing themselves to personal liability under the Federal Priority Act. Our attorneys work with these representatives and other financial, legal, and accounting professionals to conduct internal investigations, identify the areas of noncompliance, and bring the taxpayers into compliance to allow effective administration without personal exposure.

The firm’s specialized tax team has significant government experience, including a former Acting Assistant Attorney General of the U.S. Department of Justice (DOJ) Tax Division, a former Chief of the IRS Criminal Investigation Division, four attorneys with criminal and civil DOJ Tax Division experience, a former Special Trial Attorney for the IRS Office of Chief Counsel in New York, and three former Assistant United States Attorneys in the Southern District of New York. As a result, Kostelanetz attorneys have a unique familiarity with the priorities, procedures, and practices of the IRS, the DOJ, and other taxing authorities.

The firm, overall, is ranked nationwide by legal rankings agency Chambers USA in Tax Controversy, and four of the firm’s attorneys are ranked by Chambers USA for Tax: Fraud nationally. In 2018, our firm was honored as Tax Team of the Year by Chambers USA. Interviewees remarked to Chambers USA about Kostelanetz:

  • “There’s no better group of people to handle tax controversy matters – they’re very effective and personable.”
  • “They’re tax experts and they have a deep knowledge and thorough understanding of the tax code, but also how the IRS and DOJ are going to approach things.”

The firm also has been recognized as a Tier 1 National “Best Law Firm” in three categories, Tax Law, Litigation – Tax, and Criminal Defense – White-Collar, by U.S. News – Best Lawyers®.