FBAR & Whistleblower (2018) – IRS Laws Put Foreign Accounts in Jeopardy
As if there are not enough things in life for you to worry about, right?
If you are like many of our clients, you are a motivated entrepreneur, executive, doctor, lawyer, entertainer, sports figure, or other individual with foreign income, assets, accounts and investments.
Our clients have worked very, very hard at every level of their career to reach their goals.
We’ve had wonderful conversations with our clients in many far away places about their individual success stories, and the crazy paths and experiences they took to achieve their goals.
In addition, like most successful people, everyone makes a few enemies along the way.
- 1 FBAR & Whistleblowers
- 2 Sometimes Whistleblowers Benefit Society
- 3 Joe Goes to the IRS
- 4 And now the IRS Special Agents visit Jane…
- 5 Can a Whistleblower get the FBAR Money?
- 6 As part of the Bipartisan Budget Act of 2018 I.
- 7 Does the IRS really Pay Whistleblowers From FBAR Money?
- 8 What if You Never Reported?
- 9 Golding & Golding, A PLC
FBAR & Whistleblowers
Maybe you did something bad to someone (less common), or more frequently someone is just bitter at you from afar (way more common). It is usually either a competitor, former staffer, current employee, or some other self-righteous person with nothing better to do, than to try to take you down. It’s an unfortunate way of life for entrepreneurs in all types of businesses — even us.
Sometimes Whistleblowers Benefit Society
As we mentioned before on our website, if someone has done something truly bad such as hurting, injuring, or exploiting the elderly, children, women, or individuals based on race, color, sexual orientation, etc. then whistleblowing is a very good thing.
It helps bring power and justice to the underrepresented, and people should be held accountable.
On the other hand, most of the time, whistleblowers (or their representatives) are not altruistic — it’s a money grab, and it sucks.
Basically, “Joe” gets caught with his hand in the cookie jar, and wants to take down “Jane,” because she has not been caught, and is usually smarter, more sophisticated…and just better at life than Joe.
Joe Goes to the IRS
Of course he does, why wouldn’t he? Joe believes the world owes him a favor —
Joe, the bitter, hater that he is, goes to the IRS and whines about how he knows Jane has money overseas. Joe wants some free money, and believes Jane should have to give it to him via the IRS Whistleblower Program (typical backstory: Jane hires Joe; Joe stinks at his job and embellished his skill-level and talent; Jane fires Joe; Joe feels slighted, and instead of working to improve his craft and come back better next time, he wants to take down Jane — who worked a lifetime to become a success — because Joe sucks).
Maybe Jane was willful or reckless, maybe she wasn’t — but Joe spins a tail to make it appear Jane is way more diabolical than she is.
And now the IRS Special Agents visit Jane…
Luckily for Jane, her buddy who knows Joe tipped her off. Unlike many people, Jane does not run to Bolivia or Taiwan to close her accounts — she hires counsel.
So when the Agents introduce themselves, they put Jane’s counsel on notice that they will be going after the foreign accounts full force — to the tune of $9,000,000.
Jane’s counsel retorts, by putting the IRS on notice of the real backstory, and luckily for Jane, the matter is resolved without much issue.
Can a Whistleblower get the FBAR Money?
As part of the Bipartisan Budget Act of 2018 I.
Second Amendment: Ensuring that Whistleblowers under the IRS/Tax Whistleblower Law can Obtain a Reward Based on Criminal Fines and Penalties and FBAR Penalties (sanctions for illegal offshore accounts)
“(a) DEFINITION OF PROCEEDS.—
(1) IN GENERAL.—Section 7623 is amended by adding at the end the following new subsection:
‘‘(c) PROCEEDS.—For purposes of this section, the term ‘proceeds’ includes— ‘‘(1) penalties, interest, additions to tax, and additional amounts provided under the internal revenue laws, and ‘‘(2) any proceeds arising from laws for which the Internal Revenue Service is authorized to administer, enforce, or investigate, including— ‘‘(A) criminal fines and civil forfeitures, and ‘‘(B) violations of reporting requirements.’’
So there you have it, people now have even more of an incentive to rat you out.
Does the IRS really Pay Whistleblowers From FBAR Money?
Yes, they will.
In fact, the IRS recently issued an 8-figure, multi-million dollar Whistleblower award under the new law.
What if You Never Reported?
If you never properly reported your foreign income or accounts, you may qualify for one of the IRS tax amnesty programs/voluntary disclosure programs. You may also qualify for a reduced penalty — or even a penalty waiver!
Golding & Golding, A PLC
We have successfully represented clients in more than 1000 streamlined and voluntary disclosure submissions nationwide, and in over 70-different countries.
We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe.