You Fudged on Your Taxes. Here's What's Keeping You from Coming Clean.

Tax attorney Kevin Packman commented in a Barron's article about changes to the IRS' voluntary disclosure program that have discouraged participation. The program was created to offer relief to taxpayers who provided clear and accurate information about past unreported income; initially geared toward taxpayers with offshore income, availability expanded to all taxpayers beginning in 2018. However, the increase in scope saw a decrease in participation, which professionals attribute to rule changes imposing a flat penalty and application changes requiring taxpayers to check a box to admit willful noncompliance as well as updated wording to state taxes and fines have to be paid in full in a single payment or through an installment plan. Mr. Packman said this combination will negatively affect the program's appeal, which will in turn hinder the agency's ability to achieve its goals of closing the tax gap.

"Either people will remain noncompliant, or maybe they'll file delinquent returns and then attack the penalties as they get assessed," he remarked. "Those are not great options. It seems to me that offering the program they currently have is certainly going to reduce tremendously the amount of people coming forward."

READ: You Fudged on Your Taxes. Here's What's Keeping You from Coming Clean.