The Form 14457 Voluntary Disclosure Preclearance (New) Explained

IRS Form 14457 Preclearance Letter Taxpayer Help Guide

IRS Form 14457

Form 14457:  When a US Person wants to submit to VDP, they are required to use (revised) Form 14457 – Voluntary Disclosure Practice Preclearance Request and Application PDF to request preclearance.  The purpose of IRS Form 14457 is to provide US Persons with the unreported domestic or offshore accounts — and who do not qualify as non-willful — to submit to the Traditional Voluntary Disclosure Program. The Form 14457 was revised to be used specifically in the Voluntary Disclosure matters — and has two parts to it, but only Part I is required to submit a voluntary disclosure preclearance application. The program has gone through various changes and updated over the past two-years. For offshore disclosure submissions, the program mimics the now-defunct OVDP “program”– although the penalty, audit and opt-out procedures are different.  The Form 14457 is the first step to making a formal submission to the Internal Revenue Service — lets’ review the basics:

What is a Form 14457 Preclearance Request?

If you are going to make a voluntary disclosure to the IRS to report undisclosed income, assets, accounts, or investments – the IRS now requires that you use the updated form 14457 to make the request.

Part I – General Instructions

• • • Note: Use Part I of this form to make a preclearance request to determine whether you are eligible to use the voluntary disclosure practice.

    • Only submit Part 1 of this form for preclearance.

    • If you receive preclearance, proceed with submitting Part II to request preliminary acceptance. Submitting the information requested in Part I of this form does not guarantee acceptance. All answers and

      attachments must be in English.

Form 14457 Mailing Address: Internal Revenue Service

Attn.: Voluntary Disclosure Coordinator
2970 Market Street
1-D04-100
Philadelphia, PA 19104

Who Submits an IRS Voluntary Disclosure Application?

First, the IRS want to know what kind of person is making the application:

• • • Individual

    • Partnership

    • Corporation

    • Trust

    • Executor

What Type of 14457 Form Voluntary Disclosure Application is being Made?

Next, the IRS wants to know what type of disclosures are being made

• • • Domestic issues

    • Offshore issues

    • Estate and gift issues

    • Employment tax issues

    • Virtual currency issues

    • Other issues

Biographical Information About the Applicant

The IRS also wants to know information about your background, including:

• • • Your name

    • Social security or other identifying number

    • Date of birth

    • Telephone number

    • Street address

    • City

    • State

    • ZIP Code

    • Country

    • Occupation

    • Passport information

Form 14457 Tax Representative Information

The IRS wants information regarding your representative. This Information includes:

• • • Name

    • Copier form 2848 (Power of attorney)

    • Telephone number

    • Fax Number

    • Street address

    • City

    • State

    • ZIP Code

    • Country

Additional General Background Questions

• • • List any entities (corporations, partnerships, etc.) for which you are making a disclosure, include EIN if applicable. Further identification information for these entities will be required in Part II of this application

• • • Do you believe that the IRS has obtained information concerning your tax liability

• • • Disclose if you, your spouse or any related entities are currently under audit or criminal investigation by the Internal Revenue Service or any other law enforcement authority and if any income is sourced from an illegal activity

More Specific Form 14457 Questions

• • • Has the IRS notified you, your spouse or any related entities that it intends to commence an examination or criminal investigation

    • Are you, your spouse or any related entities under criminal investigation by the Internal Revenue Service

    • Are you, your spouse or any related entities under criminal investigation by any law enforcement authority

    • Do you, your spouse or any related entities have income sourced from an illegal Activity

Form 14457 Schedule of Financial Accounts

• • • List ALL noncompliant financial accounts you owned or controlled or were the beneficial owner of, either directly or indirectly.

    • The listings must cover the entire disclosure period as outlined in the Updated Voluntary Disclosure Practice Memorandum dated November 20, 2018.

    • This includes opened and closed accounts which held unreported funds during the disclosure period.

    • This includes accounts held through entities you owned or controlled or were the beneficial owner of, either directly or indirectly. Note: The entities will be further identified in Part II of this application.

    • Disclose all account numbers held at each financial institution.

    • Organize the account numbers in order of who held the account. Jointly held accounts should be identified as such and only listed once.

    • Account holders must match the disclosing taxpayer(s) from Lines 4 and 5, or an entity on Line 7 that will be subsequently disclosed in more detail in Part II after pre-clearance is received

    • If an account is closed, mark it with a “(CL)” after the account number.

Golding & Golding: About Our International Tax Law Firm

Golding & Golding specializes exclusively in international tax, and specifically IRS offshore disclosure. 

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