Introduction
The IRS recognizes that many taxpayers fail to timely and properly file income tax returns, information returns, and/or FBARs. Sometimes these failures are honest mistakes; but, other times such failures may be due to willful conduct.
The distinction between willful and non-willful conduct is an important one for purposes of certain programs the IRS offers to non-compliant taxpayers, i.e., the Voluntary Disclosure Program and the Streamlined Filing Compliance Procedures (“Streamlined Procedures”). Taxpayers who have engaged in willful conduct are not permitted into the Streamlined Procedures. This is significant because the lookback period for prior years’ unpaid income tax and the amount of the penalty is generally lower under the Streamlined Procedures.[1]
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