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IRS Form 14457: Why It’s Important & What You Need To Know

On February 15, 2022, the IRS announced Form 14457, Voluntary Disclosure Practice Preclearance Request and Application has been revised, including an expanded section on reporting virtual currency. With the rise of virtual currency, the IRS is cracking down on virtual currency tax reporting.

It also includes a penalty structure for employment, estate and gift tax issues and a checkbox for inability to pay in full.

What is Form 14457?

Form 14457 allows non-compliant taxpayers who may face criminal prosecution for willful violation of tax law, a chance to come forward, file missing or amended returns, and pay the government taxes that are owed.

In exchange, the IRS may reduce or drop criminal and civil penalties. The taxpayer must meet all the eligibility requirements of the voluntary disclosure practice and the program is still aimed at taxpayers who are willful.

Cooperation includes full payment of all tax, interest, and penalties. If full payment is unable to be made, a proposed payment arrangement, as outlined in the Collection Information Statement (Form 433-A) will need to be submitted.

Questions? Contact KRD Today

The IRS recommends consulting a tax professional to ensure compliance. If you have questions or concerns, please contact us at 847-240-1040 or contact us online.

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