IRS Issues New Form 14457 and Instructions About Its Comprehensive Domestic and International Voluntary Disclosure Program: Analyzing Key Aspects



International tax enforcement has garnered significant attention in recent years, but taxpayers have domestic problems, too. The Internal Revenue Service (“IRS”) announced a comprehensive program in November 2018, which outlined a manner for taxpayers, both entities and individuals, to rectify essentially all types of tax issues on favorable terms. The program, referred to here as the updated voluntary disclosure practice (“UVDP”), was positive in theory, but it lacked initial implementation. Fortunately, the IRS recently issued, in April 2020, the new Form 14457 (Voluntary Disclosure Practice Preclearance Request and Application), along with corresponding Instructions. While some issues remain ambiguous, this new IRS guidance clarifies many items and provides a path for taxpayers to pro-actively resolve foreign and/or domestic noncompliance of all varieties. 

This article:

  • Identifies the U.S. tax and information-reporting duties triggered by holding foreign assets
  • Explains several different disclosure programs currently offered by the IRS
  • Reviews the original guidance from the IRS upon announcing the UVDP back in 2018
  • Analyzes important information added by the IRS in 2020

About Hale E. Sheppard

HALE E. SHEPPARD, Esq. (B.S., M.A., J.D., LL.M., LL.M.T.) is a Shareholder in the Tax Controversy Section of Chamberlain Hrdlicka and Chair of the International Tax Group.

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