How to Interview a Tax Lawyer Before You Hire Them

While certain types of tax matters can be very complicated and overwhelming, hiring a tax attorney shouldn’t have to be. What makes it difficult these days is the internet is littered with tax lawyers claiming to be international tax experts, attorneys falsely claiming to be board-certified, and tax professionals touting experience they simply do not have. Let’s take a brief look at the top important questions to ask your tax attorney before retaining.

First, Do They Fear-Monger (Threats of Jail or Prosecution)?

If a tax attorney advertises in their posts and pages making it sound like every violation may lead to criminal liability or incarceration, you have to be careful with engaging this type of firm. Oftentimes these are ‘fear mongering tactics’ used to scare unsuspecting taxpayers into believing that the situation is much worse than they believe it is. If you find yourself on the receiving end of a free offshore consultation where the tax lawyer is coming out the gate spouting warnings of jail or prison, please keep in mind that you are probably being fear-mongered.

How Long Have they Practiced in the Specific Area You Need Help?

Some attorneys claim to be experts in 20 different types of tax law, but in reality tax law is very complicated and most tax law specialists will only specialize in one or two areas of tax. It is important that the specific attorney you are hiring, has the specific experience you need, in the specific area of tax you have a problem.

**If they Claim ‘Board-Certified,’ Confirm They are Really Board-Certified**

If an attorney claims to be board certified, then the only way they can earn this designation is to be board-certified in at least one state by one State Bar, even if all they practice is federal tax law.

Some tax lawyers have taken to mental gymnastics to try to make it seem like they are board-certified because they hired an accountant who is certified by the board of accountancy, but this is utter nonsense. You should be very careful before retaining any firm that claims to be board certified and cannot show you the State Bar web page that designates their license.

Do they Have an LLM in Tax (Masters)?

Because tax matters are so complicated, most experienced attorneys will have also achieved a master’s in tax law. An LLM requires additional years years of training at the graduate law school level, specifically in tax-related matters.

Are they also a Licensed EA or CPA?

Most experienced tax attorneys will also have an additional designation that allows them to prepare tax returns or to at least oversee the preparation and the return themselves. The two types of designations they will have is they will either be a licensed Enrolled Agent or a CPA.

How many Areas of Tax Do They Specialize in?

If a tax attorney tells you that they specialize in the specific area of tax you are seeking, but their blog shows they handle 10 or 20 different types of tax law then be very wary that there are actually an expert in the area they are claiming. Just because an attorney may have written a handful of posts on a specific topic does not make them specialized in that specific area.

Finally, Beware of Scammy Advertising

Some firms want to appear to be bigger than they really are — or that they have a lot more experience than they do — and so you have to be careful about sleight of hand advertising. For example, some firms will tout that they have 50 years of law experience, but in actuality what they have is one attorney with 10-15 years of experience and another 10 to 15 junior associates with one to three years experience. So while the 50 years of experience sounds like a lot, it is just a whole lot of fluff with no substance.

Late Filing Penalties May be Reduced or Avoided

For Taxpayers who did not timely file their FBAR and/or other international information-related reporting forms, the IRS has developed many different offshore amnesty programs to assist Taxpayers with safely getting into compliance. These programs may reduce or even eliminate international reporting penalties.

Late-Filing Disclosure Options

If a Taxpayer is out of compliance, there are various international offshore tax amnesty programs that they can apply to safely get into compliance. Depending on the specific facts and circumstances of the Taxpayers’ noncompliance, they can determine which program will work best for them.

*Below please find separate links to each program with extensive details about the reporting requirements and examples.

Streamlined Filing Compliance Procedures (SFCP, Non-Willful)

The Streamlined Filing Compliance Procedures is one of the most common programs used by Taxpayers who are non-willful and qualify for either the Streamlined Domestic Offshore Procedures or Streamlined Foreign Offshore Procedures.

Streamlined Domestic Offshore Procedures (SDOP, Non-Willful)

Taxpayers who are considered U.S. residents and file timely tax returns each year but fail to report foreign income and/or assets may consider the Streamlined Domestic Offshore Procedures.

Streamlined Foreign Offshore Procedures (SFOP, Non-Willful)

Taxpayers who are foreign residents may consider the Streamlined Foreign Offshore Procedures which is typically the preferred program of the two streamlined procedures. That is because under this program Taxpayers can file original returns and the 5% title 26 miscellaneous offshore penalty is waived.

Delinquent FBAR Submission Procedures (DFSP, Non-Willful/Reasonable Cause)

Taxpayers who only missed the FBAR reporting and do not have any unreported income or other international information reporting forms to file may consider the Delinquent FBAR Submission Procedures — which may include a penalty waiver.

Delinquent International Information Returns Submission Procedures (DIIRSP, Reasonable Cause)

Taxpayers who have undisclosed foreign accounts and assets beyond just the FBAR — but have no unreported income — may consider the Delinquent International Information Return Submission Procedures. Before November 2020, the IRS was more inclined to issue a penalty waiver, but since then this type of delinquency procedure submission has morphed into a reasonable cause request to waive or abate penalties.

IRS Voluntary Disclosure Procedures (VDP, Willful)

For Taxpayers who are considered willful, the IRS offers a separate program referred to as the IRS Voluntary Disclosure Program (VDP). This program is used by Taxpayers to disclose both unreported domestic and offshore assets and income (before 2018, there was a separate program that only dealt with offshore assets (OVDP), but that program merged back into the traditional voluntary disclosure program (VDP).

Quiet Disclosure

Quiet disclosure is when a Taxpayer submits information to the IRS regarding the undisclosed foreign accounts, assets, and income but they do not go through one of the approved offshore disclosure programs. This is illegal and the IRS has indicated they have every intention of investigating Taxpayers who they discover intentionally sought to file delinquent forms to avoid the penalty instead of submitting to one of the approved methods identified above.

Current Year vs. Prior Year Non-Compliance

Once a Taxpayer missed the tax and reporting (such as FBAR and FATCA) requirements for prior years, they will want to be careful before submitting their information to the IRS in the current year. That is because they may risk making a quiet disclosure if they just begin filing forward in the current year and/or mass filing previous year forms without doing so under one of the approved IRS offshore submission procedures. Before filing prior untimely foreign reporting forms, Taxpayers should consider speaking with a Board-Certified Tax Law Specialist who specializes exclusively in these types of offshore disclosure matters.

Avoid False Offshore Disclosure Submissions (Willful vs Non-Willful)

In recent years, the IRS has increased the level of scrutiny for certain streamlined procedure submissions. When a person is non-willful, they have an excellent chance of making a successful submission to Streamlined Procedures. If they are willful, they would submit to the IRS Voluntary Disclosure Program instead. But, if a willful Taxpayer submits an intentionally false narrative under the Streamlined Procedures (and gets caught), they may become subject to significant fines and penalties.

**Need Help Finding an Experienced Offshore Tax Attorney?**

When it comes to hiring an experienced international tax attorney to represent you for unreported foreign and offshore account reporting, it can become overwhelming for Taxpayers trying to trek through all the false information and nonsense they will find in their online research. There are only a handful of attorneys worldwide who are Board-Certified Tax Specialists and who specialize exclusively in offshore disclosure and international tax amnesty reporting.

*This resource may help Taxpayers seeking to hire offshore tax counsel: How to Hire an Offshore Disclosure Lawyer.

Golding & Golding: About Our International Tax Law Firm

Golding & Golding specializes exclusively in international tax, specifically IRS offshore disclosure.

Contact our firm today for assistance.