Voluntary Closing Agreement Process - Employment Tax Issues (VCAP-ET)

The IRS has established a voluntary administrative process to allow for certain employment tax issues not involving worker classification to be permanently and conclusively resolved through a closing agreement program. The objective of this voluntary process is to reduce administrative burden by saving time and resources for both the IRS and taxpayers and to enhance voluntary compliance in specified limited situations. Under this administrative process, along with other specific requirements, taxpayers must demonstrate that Form 94X-X and other correction procedures would not allow for the prompt, permanent, and conclusive resolution of the issue(s). While these procedures provide for the submission of requests for a closing agreement, whether an agreement will be entered into is a matter within the Commissioner's sole discretion. 

Where Can I Find Additional General Information on VCAP – ET Closing Agreements?

See Internal Revenue Manual section 4.23.25.2 Introduction to Voluntary Closing Agreement Requests to Resolve Employment Tax Issues (VCAP – ET).

What VCAP – ET Issues May or May Not Be Considered Under the VCAP – ET Program?

Generally, requests for voluntary closing agreements arising from VCAP - ET issues will be considered when: (1) it is advantageous to have the employment tax issue permanently and conclusively resolved; (2) the taxpayer can demonstrate that the Form 94X-X or other return procedures would not allow for prompt, permanent, and conclusive resolution of the particular employment tax issue; and (3) it has been determined that entering into a closing agreement would not prejudice the interests of the government.

See Internal Revenue Manual section 4.23.25.3, Examples of VCAP – ET Issues for detailed examples of the types of requests for closing agreements that generally will or will not be considered or accepted by the Service.

What is the Process for Submitting a Request Under the VCAP – ET Program and What Information is Required to be Included in the Request?

There is not a separate form for use in requesting consideration for a VCAP – ET; however, all requests must provide certain required information and must be submitted in writing to the following address:

            Employment Tax/Voluntary Request Coordinator
            Internal Revenue Service
            201 W. Rivercenter Boulevard Stop 5702A
            Covington, KY 41011

For information about what is required to be included in a request for VCAP – ET consideration, see Internal Revenue Manual section 4.23.25.4, Process for Submission of Voluntary Closing Agreement Requests to Resolve Employment Tax Issues.

What additional options exist for correcting employment taxes? For additional options, see Correcting Employment Taxes.


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