IRS changes voluntary disclosure policy.

Recent changes in the Internal Revenue Service employee manual end a popular IRS initiative that encouraged people who should have filed returns to do so. IRS policy no longer considers a disclosure of failure to file "voluntary" if it was made after a taxpayer received a notice of inquiry, such as a civil audit.

The 1992 IRS initiative to encourage nonfilers to pay up exempted from prosecution taxpayers who came forward even after they had been notified by the IRS, unless the notification was made by a special agent.

"Now, if a taxpayer comes forward after receiving a notice from an IRS service center," said Wilson Fadely of the IRS office of public affairs in Washington, D.C., "it is still a disclosure, but not a true voluntary disclosure that would exempt the taxpayer from prosecution, and all bets are off."

The IRS has made this change quietly, with no formal announcement.