It is Simply Not Worth the Risk
Even though the notion of voluntarily getting into compliance with the Internal Revenue Service (IRS) through OVDP, the Streamlined Program or Reasonable Cause is scary and overwhelming – by making a Quiet Disclosure, you are breaking the law, and that is never the correct option.
What is a Quiet Disclosure?
A Quiet Disclosure is when you knowingly, intentionally, or recklessly file/amend past tax returns to include unreported foreign income, accounts, assets, or investments.
Typically, when a person files a Quiet Disclosure, they have one or multiple forms that were not properly filed with the IRS, including:
- FBAR (Fincen 114)
- FATCA Form 8938
- Form 5471
- Form 5472
- Form 8621
- Form 8865
Offshore Disclosure Penalties May Be Reduced or Waived
If the reason you did not previously report the information or income to the IRS was because you were unaware of the requirement to do so, there are relatively painless methods you can use to safely get into compliance. They include:
- Streamlined Domestic Offshore Procedures
- Streamlined Foreign Offshore Procedures
- Delinquent Information Return Filing
- Delinquent FBAR Filing
- Reasonable Cause
Even if you were willful in years past, if you enter OVDP — you nearly eliminate any chance of IRS audit, or criminal investigation for these international tax related issues. Moreover, you may be able to reduce the penalties by opting out, making a mark-to-market election, or implementing FAQ 55 penalty waivers.
Once You Knowingly Make a Quiet Disclosure…
…You are willful. Even if you were non-willful before, by “quietly” submitting prior year tax returns or FBARs, you are intentionally omitting necessary information to the IRS, which could now turn your previous non-willful noncompliance into a full-blown willfulness/tax fraud situation.
**If you “unintentionally” made a previous Quiet Disclosure, you may still qualify for the Streamlined or Reasonable Cause option.
Can I Just Properly Report Going Forward?
Here is the problem with that strategy: if you knew you were supposed to go back and file previous returns or FBARs and did not do so, and your are audited, you could be considered to have acted with reckless disregard and/or as making an intentional omission – which could lead to willful penalties down the line (and those penalties can be very steep).
Is Your CPA Telling You to Do A Quiet Disclosure?
The reason your CPA is telling you to file a Quiet Disclosure is because he or she does not want to get in trouble. If it is a new CPA who is recommending this strategy, then we recommend seeking out a new CPA to better assist you.
How Do I Legally into IRS Compliance?
The safest and most effective method of getting into compliance is by submitting to one of the IRS offshore voluntary disclosure programs.
At Golding & Golding, we represent hundreds of taxpayers each year in over 55 different countries and we limit our entire practice to IRS offshore voluntary disclosure.
Email us to schedule a Reduced Fee Telephone Consultation to speak with an attorney.
**Tax Law is a specialized area of law and Offshore Disclosure is especially complex. Your OVDP or Streamlined Attorney should have:
- IRS Audit Experience
- Litigation Experience
- At least 15-20 years of experience as a practicing lawyer
- An advanced Master’s of Tax Law Degree (LL.M.); and
- Either a CPA or Enrolled Agent (EA) license.
Reduced Fee Consultation
We do not offer “free” initial telephone consultations, because free initial telephone consultations are nothing more than “Sales Pitches” designed to misinform and scare you into making a brash decision.
When you are ready to discuss the specifics of your case, please email us to schedule a Reduced Fee Telephone Consultation with an experienced IRS Offshore Voluntary Disclosure Lawyer.
We offer consultations in 30-minute, 60-minute, and 90-minute increments.