Tino Lisella and Valerie Makarewicz Quoted in Law360: “IRS' Proposed Voluntary Disclosure Rule Could Be Dissuasive”

Tino Lisella and Valerie Makarewicz were quoted in a Law360 article titled “IRS' Proposed Voluntary Disclosure Rule Could Be Dissuasive.” The article discusses the three-month submission deadline the IRS proposed for its voluntary disclosure practice.

The proposed deadline "seems arbitrary," according to Makarewicz. The concern among some practitioners is that the program could treat taxpayers differently based on their ability to pay, with wealthy taxpayers able to "buy their way out of criminal liability," she said. Meanwhile, "a person who might not be that affluent won't have that ability to participate in the program if they aren't compliant and [can't] get their money together within three months."

Lisella said there are situations where taxpayers should be able to ask for reasonable extensions, such as when they've made requests for information from foreign banks. For the IRS, he said, it seems that it would be better to work with the taxpayer who wants to come into compliance, even if it takes them six months or nine months. If that person has only three months, they may feel like "they can't come into the program until they have everything buttoned down.

For Makarewicz, the penalty framework should balance not rewarding taxpayers who intentionally did not disclose foreign bank accounts while still encouraging them to come forward. "I appreciate the fact that a taxpayer wants clarity ... if there are things that are missing in the IRS' VDP proposal that ought to be fleshed out a little bit better," she said. "But you guys didn't do it the first time. This is sort of the consequence of it."

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