Taxpayer Advocate Convinces IRS to Remove Willfulness Requirement for Voluntary Disclosure Program

Cooler minds prevailed: The Taxpayer Advocate convinced the IRS to ‘undo’ a recent, highly criticized change to the Voluntary Disclosure Program that required the taxpayer’s admission of willfulness prior to participation.

The IRS’s Voluntary Disclosure Program (VDP) offers taxpayers with potential criminal tax exposure a critical opportunity to self-correct their compliance failures. By voluntarily coming forward, these individuals and entities can pay delinquent taxes, penalties, and interest and avoid criminal prosecution. In return, the IRS gains revenue, closes part of the tax gap, and promotes future compliance. When effectively structured and fairly administered, the VDP serves as a powerful compliance tool that benefits both taxpayers and the government. However, starting in 2018 and continuing through last year, the IRS made significant changes to the VDP that made it more burdensome, reduced its attractiveness, and caused many practitioners to hesitate to recommend it to their clients, thus affecting participation.

One of the most controversial changes the IRS made was adding a “willfulness checkbox” on Form 14457, Voluntary Disclosure Practice Preclearance Request and Application. Taxpayers must check this box and affirmatively admit under penalty of perjury that they were willful in their noncompliance actions. The legal implications of making this admission are alarming. By affirming willfulness, taxpayers risk incriminating themselves, especially if the IRS decides to deny them participation in the VDP or later revokes their preliminary acceptance and uses this admission against them.

The Taxpayer Advocate was an early and vocal opponent of this requirement, and shortly after its implementation, recommended that the willfulness checkbox be eliminated. On June 24, 2025, the Taxpayer Advocate announced that the IRS has committed to remove the checkbox from the next revision of Form 14457. By deleting the checkbox, the IRS will lessen taxpayers’ and practitioners’ concerns regarding the legal effect of making an explicit admission of willfulness and encourage greater participation in the VDP.

This may not be the only change that the IRS makes to the VDP. The IRS is still reviewing the Taxpayer Advocate’s recommendations to expand the program to make allowances for illegal income derived from, or related to, the sale of marijuana. Not all recommendations by the Taxpayer Advocate, however, have been warmly received. The IRS rejected the Taxpayer Advocate’s recommendation to allow flexibility for deviation from the 75% civil penalty. The IRS also rejected the Advocate’s recommendations that (i) the IRS extend appeal rights to VDP participants who disagree with positions taken by the IRS examiner and (ii) the IRS allow taxpayers who establish they cannot pay in full to enter alternative payment arrangements.

For more details about Taxpayer Advocate’s recommendations and the IRS’ responses, click HERE.

Of course, Rome was not built in a day, and overall, the Taxpayer Advocate has scored a big win for taxpayers. Kudos to the Taxpayer Advocate for breathing life back into a vital IRS program that was near death due to recent changes.

If you or your clients have any questions about this Blog post, the IRS VDP or other civil or criminal tax-related topics, feel free to contact me at (214) 749-2464 or adaddino@meadowscollier.com.