Should You Make a Voluntary Disclosure?
Should You Make a Voluntary Disclosure: There are many reasons to consider entering the Voluntary Disclosure Program. The most important reason is because the IRS has implemented a highly aggressive enforcement policy when it comes to foreign account compliance. In addition, with the introduction of FATCA, renewed interest in FBAR Compliance, and a significantly increase in the number of offshore penalties being issued, it is important to stay compliant. There have been many recent FBAR cases as well, with the IRS winning on issues involving willfulness — sometimes even on summary judgment. If you are out of compliance, there are various amnesty programs, such as FBAR Amnesty or FATCA Amnesty. These programs are collectively referred to as voluntary disclosure.
What is Voluntary Disclosure?
The Voluntary Disclosure Program process is the legal process of getting into IRS compliance regarding undisclosed, unreported and undeclared foreign accounts, income, assets, and investments.
Voluntarily getting into Compliance is definitely a big decision to make. It essentially boils down to whether you want to actually enter into one of the approved offshore voluntary disclosure programs, or take a different route.
Reasons to Consider Making a Voluntary Disclosure
Here are 5 important reasons:
FATCA Uncovers Secret Accounts
FATCA is powerful tax and reporting enforcement tool.
Unfortunately, with the implementation and enforcement of FATCA (Foreign Account Tax Compliance Act), coupled with the renewed interest by the IRS in issuing penalties for noncompliance with FBAR filing and international Informational Returns (3520-A, 5471, 5472, 8621, 8865), offshore disclosure is a good option.
Voluntary Disclosure May End
Since under FATCA — and renewed interest in FBAR — the IRS has been receiving for U.S. Account Holder information for more than 113 countries and 300,000 Foreign Financial Institutions.
And, since with the IRS significantly increasing enforcement penalties for unreported foreign accounts, assets, investments, and income, if you are considering entering the program – now maybe the best time.
When it comes to offshore disclosure, there are three main programs.
The value of the penalty is determined by which program you enter, which is determined by the facts and circumstances of your situation — and whether you decide to pay the penalty or opt-out or seek audit.
Avoiding an IRS Criminal Investigation
While the IRS will not say for certain that if you enter traditional VDP that you will escape criminal investigation the IRS has also stated that as long as you make a full disclosure, the IRS will most likely not pursue any criminal investigation.
To date, we have handled numerous OVDP and VDP cases (in addition to more than 1500 Streamlined and Reasonable Cause/Delinquency Procedure cases), and have not had a single person criminally investigated regarding their disclosure.
Penalties Will Continue Increase
Since the inception of the traditional OVDP and VDP, the offshore penalties have increased significantly.
Presuming that the IRS does not eliminate the program, chances are both OVDP and/or Streamlined programs are due for a penalty increase.
New U.S. Government Tax Enforcement Groups
Recently, the IRS has introduced new enforcement groups to focus on the recovery of money in highly profitable areas for the IRS.
As the number of people being audited or examined increases, the ability to enter the offshore disclosure programs decrease – because once a person is under audit or examination, they no longer qualified for the program.
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.
*Please beware of copycat tax and law firms misleading the public about their credentials and experience.
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+.
How to Hire Experienced Offshore Counsel?
Generally, experienced attorneys in this field will have the following credentials/experience:
- 20-years experience as a practicing attorney
- Extensive litigation, high-stakes audit and trial experience
- Board Certified Tax Law Specialist credential
- Master’s of Tax Law (LL.M.)
- Dually Licensed as an EA (Enrolled Agent) or CPA
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 FBAR and FATCA. Contact our firm today for assistance with getting compliant.