Are you being Misled About IRS Offshore Disclosure?
Ever since the introduction of the “stand alone” streamlined procedures back in 2014, many clients have chosen the streamlined path instead of traditional voluntary disclosure.
We have handled more than 1000 streamlined offshore and voluntary discourse cases.
While the Streamlined Procedures may appear (relatively) straightforward, they are not.
There are always complex issues lurking beneath the surface, that attorneys who do not practice exclusively in this area do not understand.
This puts their client’s submission at serious risk.
Inexperienced Counsel Puts Clients in Danger
Since the requirements for the streamlined program are generally less onerous than traditional voluntary disclosure, it seems like every attorney with a few years of attorney experience and a handful of streamlined cases under their belt is suddenly an “expert.”
Just earning a CPA or EA credential and/or LL.M. does not substitute for the extensive offshore disclosure attorney experience necessary to become effective counsel — it complements it.
Many of these attorneys who “claim” to specialize in this area of tax and law have no prior attorney experience, have never prepared tax returns with PFIC or related issues, and either just struck out on their own, or have non-legal experience they are trying to substitute for lack of litigation, trial and tax law experience.
We inherit these types of cases all the time:
We want to try to help nip this in the bud, and prevent other unsuspecting taxpayers from further harm.
A Recent Case of Seriously Bad Streamlined Offshore Lawyering
The origin of this post was the result of a recent case referral.
We were referred a case from an individual who first used a small law firm that sent the client to a pre-selected, outside CPA.
The attorney claims to specialize, but lists other areas of non-international tax law practice on their website. The Attorney only recently opened their own law practice a few years back, and did not feel it important to attend the CPA meetings with the client.
During one of these meetings, the client inadvertently communicated legal information during a “casual conversation” to the CPA — which is not privileged.
The client is now being audited — and is at serious risk.
Common Streamlined Offshore Cases Golding & Golding has been Retained to Fix
Here are five (5) common mistakes we see happen often:
Using an Attorney who Hires an Outside Accountant to Prepare your Tax Returns
Inexperienced attorneys will farm your tax returns out to an accountant, under a “Kovel Agreement.”
Kovel is rarely used by experienced counsel in streamlined offshore cases. In nearly all cases, the entire submission (tax and law) are handled in-house.
The matter will be handled entirely in house by the Board-Certified Tax Law Specialist and their team. This is not done to extend the attorney-client privilege to tax return preparation; rather, it serves to protect the attorney-client privilege on legal matters.
At Golding & Golding, our team has prepared thousands of tax returns, and are often asked to counsel small and large CPA firms on tax issues involving PFIC, Foreign Trusts, Accounts, Assets, and Foreign Pensions.
Devaluing the Importance of Experience and Credentials
A Tax Lawyer Specialist in Offshore Disclosure will generally have all five (5) of these main qualifications:
- 20-Years Attorney experience
- Extensive Audits, Litigation & Trial experience
- Board Certified Tax Law Specialist
- Master’s of Tax Law (LL.M.)
- Dually-licensed as an Attorney/EA or Attorney/CPA
These credentials are considered “pre-requisites” for the effective practice of offshore disclosure law.
Using Words such as “Criminal” or “Jail” during the Consultation
This is a form of fear-mongering. Making a streamlined disclosure has no direct criminal aspect to it. Even a traditional Voluntary Disclosure (VDP) is civil in nature. If a person was criminally investigated by the IRS, they would retain a criminal attorney — but this is rare.
To date we have never had (nor do we know of any other experienced offshore disclosure lawyers who have had) a client criminally investigated in the midst of an offshore disclosure.
Handling Your Cases in an Assembly-Line Fashion
Some attorneys will quote you a specific amount of time to handle your case. This is an absurd way to practice streamlined offshore disclosure law, especially since many of the complex issues are hidden deep within the analysis.
If an attorney quotes you 5-10 hours to complete a streamlined filing submission – it is destined to fail — whether now or in the future if it is audited at a later date. And, since most cases fall under the 6-year statute, the statute of limitations has not even expired for even the earliest of stand-alone streamlined cases.
*The stand-alone Streamlined Procedures were not introduced until mid-2014.
**If the IRS believes there is civil fraud, there is no statute of limitations.
Embellishing Prior IRS Experience and/or Streamlined and Offshore Disclosure
It is important that you hire a firm that specializes exclusively in this area of law, and has handled several hundred submissions. That way, the attorney teams knows what to look for, and how to best approach your case. When an attorney does not have this experience, they will embellish their streamlined disclosure experience — putting you at risk.
For example, they may claim to have worked at the IRS, only to find that they did not work at the IRS as an attorney. And, if they did work at the IRS as an attorney, it was not in the offshore disclosure department.
You can learn more about the different roles IRS personnel play in your case.
Understand that there is a lot of bad information out there. By making a streamline submission you are certifying information under penalty of perjury to the IRS.
It is not something to be taken lightly, and not something to trust to an inexperienced attorney.
Golding & Golding: About our International Tax Law Firm
Golding & Golding specializes exclusively in international tax, and specifically IRS offshore disclosure.
We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe. Our attorneys have worked with thousands of clients on offshore disclosure matters, including FATCA & FBAR.
Each case is led by a Board-Certified Tax Law Specialist with 20-years experience, and the entire matter (tax and legal) is handled by our team, in-house.
Less than 1% of Tax Attorneys Nationwide Are Certified Specialists
Sean M. Golding is one of less than 350 Attorneys (out of more than 200,000 practicing California Attorneys) to earn the Certified Tax Law Specialist credential. The credential is awarded to less than 1% of Attorneys.
Recent Golding & Golding Case Highlights
- We represented a client in an 8-figure disclosure that spanned 7 countries.
- We represented a high-net-worth client to facilitate a complex expatriation with offshore disclosure.
- We represented an overseas family with bringing multiple businesses & personal investments into U.S. tax and offshore compliance.
- We took over a case from a small firm that unsuccessfully submitted multiple clients to IRS Offshore Disclosure.
- We successfully completed several recent disclosures for clients with assets ranging from $50,000 – $7,000,000+.
Interested in Learning More about Golding & Golding?
No matter where in the world you reside, our international tax team can get you IRS offshore compliant.
Golding & Golding specializes in Streamlined Filing Procedures. Contact our firm today for assistance with getting compliant.