IRS Foreign Disclosure (U.S. & Foreign Resident Taxpayer Amnesty)(2018)(Golding & Golding)

IRS Foreign Disclosure (U.S. & Foreign Resident Taxpayer Amnesty)(Golding & Golding)

IRS Foreign Disclosure – U.S. & Foreign Resident Account Amnesty

If you have unreported foreign income, assets, or investments that were not properly disclosed to the IRS, then there are IRS options available to you to get into compliance,

An IRS Foreign Disclosure occurs when a person submits revised tax returns, informational returns, and other information to the IRS in hopes of reducing the chance that the IRS investigates and penalizes them. It is a form of Tax Amnesty, that has been on the books for a very long time.

IRS Foreign Disclosure

The traditional IRS Voluntary Disclosure Program can be used for applicants with Foreign Income or U.S. Income.

Common IRS Voluntary Disclosure Questions:

  • What is the IRS Voluntary Disclosure Program?
  • Must the money be from Legal Sources?
  • What is benefit of IRS Voluntary Disclosure?
  • Can I avoid Criminal Prosecution?
  • How does IRS Voluntary Disclosure help?
  • How do I make an IRS Voluntary Disclosure?
  • Examples of How IRS Voluntary Disclosure Procedures
  • What kind of IRS Penalties can I be subject to?
  • What won’t the IRS accept as an IRS Voluntary Disclosure?

IRS Voluntary Disclosure Program – What is it?

The IRS Voluntary Disclosure is a method for getting into compliance with IRS if you have unreported Income, as long as the money is not from Illegal Sources. 

Why Must Money be from Legal Sources?

The reason the money must be from legal sources is simple: If the money was from illegal sources, then by entering the IRS Voluntary Disclosure Program, you would be “cleaning dirty money,” and the IRS would be serving as the launderer…

Want to use the IRS to Launder Foreign Money…Think Again.

IRS Offshore Voluntary Disclosure Program Lawyers (Golding & Golding, Board Certified Tax Law Specialist)

IRS Offshore Voluntary Disclosure Program Lawyers (Golding & Golding, Board Certified Tax Law Specialist)

Why Voluntarily Disclose?

The IRS is cracking down on all forms of Tax Fraud and Tax Evasion.  While the IRS’ recent focus has been directed toward Offshore Disclosure (OVDP and the Streamlined Program) involving Foreign Money, Assets and Income – U.S. Tax Crime is still a major enforcement priority.

In addition, with OVDP coming to and end, the traditional IRM disclosure will the primary source of disclosure for people who were willful.

Whether you are a U.S. Resident or business with unreported Income, or a Foreign Resident (U.S. Person) with unreported Business Income, Assets or Earnings, it is important to remain in tax U.S. tax compliance.

IRS Voluntary Disclosure 

For many years, the IRS has had a non-OVDP voluntary disclosure in place. The program is designed for anyone who is out of tax compliance for failing to report income to the U.S Government.

What many people do not realize, is that their failure to file/pay U.S. tax on income earned in the United States may lead to significant fines, penalties and worse depending on the nature and extent of the non-compliance.

*Please keep in mind the program is designed for money that was earned legally but not reported; if the money was earned illegally — you do not qualify for the program.

IRS Voluntary Disclosure Practice (Avoid Criminal Tax Investigation, Indictment & Prosecution) - Golding & Golding

IRS Voluntary Disclosure Practice (Avoid Criminal Tax Investigation, Indictment & Prosecution) – Golding & Golding

When is Criminal Prosecution Recommended?

If the IRS catches you committing a tax crime, chances are they will investigate.

As recent history has shown, Movie Stars, Musicians, Moguls, Politicians are all fair game when it comes to IRS criminal prosecutions.

While there are no hard and fast rules regarding investigating tax crimes, the general consensus is that after two years of either non-filed tax returns, under-reporting income, embellishing deductions/expenses or any number of other related tax misgiving — you are beginning to tread into criminal tax territory.

Moreover, situations that will greatly heighten your chances of getting caught, include:

  • A scorned spouse or lover;
  • Angry or vindictive Business Partner;
  • Third-Party who just doesn’t like you (you would be amazed…);
  • Someone who overheard something about what you did and wants to “blow the whistle”
  • Someone who is already in trouble and uses information he or she has against you to leverage a better deal

How does IRS Voluntary Disclosure Help

As provided by the IRS:

It is currently the practice of the IRS that a voluntary disclosure will be considered along with all other factors in the investigation in determining whether criminal prosecution will be recommended. This voluntary disclosure practice creates no substantive or procedural rights for taxpayers as it is simply a matter of internal IRS practice, provided solely for guidance to IRS personnel. Taxpayers cannot rely on the fact that other similarly situated taxpayers may not have been recommended for criminal prosecution.

What does this Mean?

Presumably, if you make a full disclosure and pay all the necessary taxes, fines, penalties and interest associated with the disclosure — you should be able to avoid criminal prosecution.

Of course, there are no guarantees, but the IRS does have somewhat limited resources. In other words, the IRS simply does not have the time or money to enforce tax crimes against each and every person who may have made a mistake – or worse – in prior tax years.

As further provided by the IRS: 

No Guarantee of Immunity from Prosecution

Voluntary disclosure will not automatically guarantee immunity from prosecution; however, a voluntary disclosure may result in prosecution not being recommended. This practice does not apply to taxpayers with illegal source income.

Truthful and Timely

A voluntary disclosure occurs when the communication is truthful, timely, complete, and when:

  • A taxpayer shows a willingness to cooperate (and does in fact cooperate) with the IRS in determining tax liability
  • The taxpayer makes good faith arrangements with the IRS to pay in full, the tax, interest, and any penalties.

What is at Risk if You do Not Disclose?

If a person is criminally or civilly investigated before they have an opportunity to enter the IRS Voluntary Disclosure Program, they may find themselves on the receiving end of an Eggshell Audit, Reverse Eggshell Audit, IRS Special Agent Investigation, and/or Criminal Prosecution by either the Internal Revenue Service or the Department of Justice (depending on the extent and nature of the crimes).

Even though there are no guarantees under the IRS Voluntary Disclosure Program, it is probably a better alternative than to risk noncompliance and be caught by the IRS. Although the IRS is not prosecute each and every criminal case, the IRS generally only prosecutes the ones they think they can win.

This explains why the IRS has a nearly 100% conviction rate on any tax evasion case for tax fraud case it brings against a taxpayer. Moreover, The jail sentences and prison sentences for white-collar crimes, including tax fraud has risen significantly in the last few years-due to the term or phrase “financial murder,”  which is a term the government likes to use and presented to a jury when bringing this type of matter.

FATCA - Example of How the IRS Finds U.S. Non-Residents & Expats

The U.S Government is Using FATCA To Prosecute U.S. Citizens and Non-U.S. Citizens

                     

The Dilemma – Should I Voluntarily Disclose or Not?

There are three decisions to make for a person who has committed a tax crime:

Do Nothing

Every tax professional has the duty and responsibility to tell taxpayers who are out of compliance and/or not properly filing their taxes that they should go back and make sure their taxes are correct.

With that said, it is not a taxpayer’s responsibility to have to listen to their tax attorney or CPA. In other words, the tax attorney cannot force the taxpayer to go back and amend their tax returns – or report the person to the IRS. 

One issue keep in mind is that if the IRS believes it can prove that the taxpayer committed civil fraud, there is generally no time limit as to how far back the IRS can go to try and detect how long tax crimes have been going on for – which can increase your penalties exponentially.

Amend Prior Returns

It is important to keep in mind that the disclosure program is a voluntary program. In other words, a person does not have to enter the voluntary disclosure program in order to move forward and amend their tax returns – no matter how much damage has been done. For all the taxpayer knows, he or she may be able to amend his/her tax returns, pay any outstanding taxes and interest – and the IRS never audits the individual.

The problem with this strategy is that if they are detected and it turns out that the person is prosecuted, the taxpayer would probably be in a worse position then if they had come forward under the voluntary disclosure program; paid the taxes, fines and penalties, and resolved the matter.

It all boils down to a taxpayer’s risk management level — whether they want to pay the outstanding tax fraud penalties, and how bad they want to try to avoid prison, which brings us to our third option.

Voluntary Disclosure

Due to the potential criminal nature of Voluntary Disclosure, a Taxpayer should first speak with an experienced voluntary disclosure lawyer before making any representation to the IRS.

Experienced IRS Voluntary Disclosure Attorneys (Golding & Golding Represents Clients Worldwide)

Experienced IRS Voluntary Disclosure Attorneys (Golding & Golding Represents Clients Worldwide)

How to Make an IRS Voluntary disclosure?

Unlike the offshore disclosure programs, the IRS voluntary disclosure program is a bit different. With offshore disclosure, there very specific rules and regulations involving the actual disclosure those rules and procedures are not met, then the disclosure will be rejected.

With the IRS Voluntary Disclosure Program there is no one particular way to make a disclosure.

Why? Presumably because there are so many different rationales and alternatives for somebody not reporting US-based income that a simple set of procedures would simply not suffice.

IRS (IRM) Voluntary Disclosure Practice

Let’s focus on how thw non-OVDP IRS Voluntary Disclosure Practice (program) works:

What Must Be Included in the Letter?

Instead of providing exact instructions, the IRS provides guidelines and examples. Here, the Guidelines for voluntary disclosure provide that the IRS requires that a taxpayer include the following in their disclosure:

Willingness to Cooperate

A taxpayer shows a willingness to cooperate (and does in fact cooperate) with the IRS in determining his/her correct tax liability.

Good-Faith Effort

The taxpayer makes good faith arrangements with the IRS to pay in full, the tax, interest, and any penalties determined by the IRS to be applicable.

The Submission Must be Timely

In order for an IRM Voluntary Disclosure submission to be timely, it must be:

Not Under Personal IRS Examination

The IRS has initiated a civil examination or criminal investigation of the taxpayer, or has notified the taxpayer that it intends to commence such an examination or investigation.

Hopefully, Nobody Snitched on You

The IRS has received information from a third party (e.g., informant, other governmental agency, or the media) alerting the IRS to the specific taxpayer’s noncompliance.

No Directly Related IRS Examination

The IRS has initiated a civil examination or criminal investigation which is directly related to the specific liability of the taxpayer.

No Criminal Action Initiated

The IRS has acquired information directly related to the specific liability of the taxpayer from a criminal enforcement action (e.g., search warrant, grand jury subpoena).

What Type of Letter is Submitted?

Unlike the pre-clearance letter in the traditional OVDP, there is no set introductory letter that is submitted for the IRM program. Rather, the Internal Revenue Manual provides examples of what a proper disclosure may consistent of.

Here are examples examples provided by the IRS:

Example 1 (Attorney Letter and Amended Returns)

A letter from an attorney which encloses amended returns from a client which are complete and accurate (reporting legal source income omitted from the original returns), which offers to pay the tax, interest, and any penalties determined by the IRS to be applicable in full and which meets the timeliness standard set forth above. 

Example 2 (Barter Exchange)

A disclosure made by a taxpayer of omitted income facilitated through a barter exchange after the IRS has announced that it has begun a civil compliance project targeting barter exchanges but before it has commenced an examination or investigation of the taxpayer or notified the taxpayer of its intention to do so. In addition, the taxpayer files complete and accurate amended returns and makes arrangements with the IRS to pay in full, the tax, interest, and any penalties determined by the IRS to be applicable.

Example 3 (Tax Scheme, IRS Compliance Project)

A disclosure made by a taxpayer of omitted income facilitated through a widely promoted scheme that is the subject of an IRS civil compliance project. Although the IRS already obtained information which might lead to an examination of the taxpayer, it not yet commenced any such examination or investigation or notified the taxpayer of its intent to do so. In addition, the taxpayer files complete and accurate returns and makes arrangements with the IRS to pay in full, the tax, interest, and any penalties determined by the IRS to be applicable.

Example 4 (Unfiled Returns, IRS Notice)

A disclosure made by an individual who has not filed tax returns after the individual has received a notice stating that the IRS has no record of receiving a return for a particular year and inquiring into whether the taxpayer filed a return for that year. The individual files complete and accurate returns and makes arrangements with the IRS to pay, in full, the tax, interest, and any penalties determined by the IRS to be applicable. This is a voluntary disclosure because the IRS has not yet commenced an examination or investigation of the taxpayer or notified the taxpayer of its intent to do so and because all of the elements set forth in (3), above have been met.

What are Disqualifying Factors?

The IRS has listed various factors that will disqualify a person from successfully making an IRS Voluntary Disclosure. These factors include:

If a taxpayer expresses an interest in making a voluntary disclosure, he/she must be asked the following questions to determine if potential disqualifying factors exist:

  • Are you currently the subject of a criminal investigation or civil examination? (If yes, specify)
  • Has the IRS notified you that it intends to commence an examination or investigation? (If yes, specify)
  • Are you under investigation by any law enforcement agency? (If yes, specify)
  • Is the source of any of your income from illegal activity? 
  • Do you have any reason to believe that the IRS has obtained information concerning your tax liability? (If yes, specify.)

*If the taxpayer responds yes to any of the above questions, the facts and circumstances of each investigation must be clarified to determine if it is a disqualifying factor.

How Does the IRS Evaluate the Disclosure?

As with most issues that have a criminal aspect to it, it is typically the IRS Special Agents who will evaluate the submission.

As provided by the IRS:

– Special agents will evaluate disclosures to determine if the information provided is truthful and complete, and shall make a recommendation to the SAC, as to whether or not the taxpayer has met all voluntary disclosure practice criteria.

– The evaluation should be completed as expeditiously as possible, ideally within 10 working days or less from the date the complete voluntary disclosure communication from the taxpayer has been received. The SAC should be apprised if an evaluation cannot be completed within 30 days.

As part of the evaluation process special agents will query the following databases:

  • The Criminal Investigation Management Information System (CIMIS)
  • Integrated Data Retrieval System (IDRS)
  • The Currency and Banking Retrieval System (CBRS) Database
  • The National Crime Information Center Database (NCIC)

– The special agent needs to query all applicable databases during the evaluation process of the voluntary disclosure matter including a national query for criminal investigations within the CIMIS database as noted above.

– If the indices checks (or any other evaluative steps) disclose potentially disqualifying information the taxpayer should be contacted and offered an opportunity to provide an explanation.

– If a satisfactory explanation cannot be provided, this may constitute a disqualifying factor.

– If the indices checks disclose no disqualifying information, the voluntary disclosure will be referred to the SAC, with a recommendation that the matter be forwarded to SB/SE or LB&I Offshore Identification Unit.

What if You Don’t Make the Cut?

Like with any audition or tryout, not everyone makes the team, gets the part…or is accepted into IRS Voluntary Disclosure.

As provided by the IRS:

– If the SAC determines that a disclosure does not meet all IRS voluntary disclosure criteria, a letter will be sent to the taxpayer informing them of the reason(s) he/she is ineligible to participate in the IRS’s voluntary disclosure practice. It is not necessary to cite specific reasons for the rejection if it would compromise an ongoing investigative matter.

– Criminal Investigation will evaluate the criminal potential of all negative evaluations. Therefore, the assigned special agent should initiate a PI number within CIMIS. This PI number is a separate number from the voluntary disclosure number. If the matter is not acceptable for investigation, it will be forwarded to PSP for whatever action they deem appropriate.

A Few Key Tips as Provided by the IRS

When is the Disclosure Considered Untimely?


a.  the IRS has initiated a civil examination or criminal investigation of the taxpayer, or has notified the taxpayer that it intends to commence such an examination or investigation;


b.  the IRS has received information from a third party (e.g., informant, other governmental agency, or the media) alerting the IRS to the specific taxpayer’s noncompliance;


c.  the IRS has initiated a civil examination or criminal investigation which is directly related to the specific liability of the taxpayer; or


d.  the IRS has acquired information directly related to the specific liability of the taxpayer from a criminal enforcement action (e.g., search warrant, grand jury subpoena).

Examples of what are Not Considered an IRS Voluntary Disclosure


a.  a letter from an attorney stating his or her client, who wishes to remain anonymous, wants to resolve his or her tax liability. This is not a voluntary disclosure until the identity of the taxpayer is disclosed and all other elements of (3) above have been met.


b.  a disclosure made by a taxpayer who is under grand jury investigation.  This is not a voluntary disclosure because the taxpayer is already under criminal investigation.  The conclusion would be the same whether or not the taxpayer knew of the grand jury investigation.


c.  a disclosure made by a taxpayer, who is not currently under examination or investigation, of omitted gross receipts from a partnership, but whose partner is already under investigation for omitted income skimmed from the partnership.  This is not a voluntary disclosure because the IRS has already initiated an investigation which is directly related to the specific liability of this taxpayer.  The conclusion would be the same whether or not the taxpayer knew of the ongoing investigation.


d.  a disclosure made by a taxpayer, who is not currently under examination or investigation, of omitted constructive dividends received from a corporation which is currently  under examination.  This is not a voluntary disclosure because the IRS has already initiated an examination which is directly related to the specific liability of this taxpayer.  The conclusion would be the same whether or not the taxpayer knew of the ongoing examination.


e.  a disclosure made by a taxpayer after an employee has contacted the IRS regarding the taxpayer’s double set of books.  This is not a voluntary disclosure even if no examination or investigation has yet commenced because the IRS has already been informed by the third party of the specific taxpayer’s noncompliance.  The conclusion would be the same whether or not the taxpayer knew of the informant’s contact with the IRS.

Making an IRS Voluntary Disclosure – Use an Attorney

The voluntary disclosure material provided by the IRS indicates that the attorney should make the submission. There is no attorney-client privilege with a CPA, which means the information you discuss with your CPA may not be confidential or protected by privilege.

That also means the IRS maybe able to question a CPA about the contents of the submission. This is why you will not want to utilize a CPA to make this submission but rather an attorney to ensure you have the attorney-client privilege.

IRS Voluntary Disclosure is All We Do!

We represent all different types of clients. High net-worth investors (over $40 million), smaller cases ($100,000) and everything in-between.

We represent clients in over 60 countries and nationwide, with all different types of assets, including (each link takes you to a Golding & Golding free summary):

Who Decides to Enter IRS Voluntary Disclosure

All different types of people submit to IRS Voluntary Disclosure. We represent Attorneys, CPAs, Doctors, Investors, Engineers, Business Owners, Entrepreneurs, Professors, Athletes, Actors, Entry-Level staff, Students, and more.

You are not alone, and you are not the only one to find himself or herself in this situation.

Sean M. Golding, JD, LL.M., EA – Board Certified Tax Law Specialist

Our Managing Partner, Sean M. Golding, JD, LLM, EA is the only Attorney nationwide who has earned the Certified Tax Law Specialist credential and specializes in IRS Offshore Voluntary Disclosure and closely related matters.

In addition to earning the Certified Tax Law Certification, Sean also holds an LL.M. (Master’s in Tax Law) from the University of Denver and is also an Enrolled Agent (the highest credential awarded by the IRS.) 

He is frequently called upon to lecture and write on issues involving IRS Voluntary Disclosure.

*Click Here to Learn about how Attorneys falsely market their services as “specialists.”

Less than 1% of Tax Attorneys Nationwide

Out of more than 200,000 practicing attorneys in California, less than 400 attorneys have achieved this Certified Tax Law Specialist designation.

The exam is widely regarded as one of (if not) the hardest tax exam given in the United States for practicing Attorneys. It is a designation earned by less than 1% of attorneys.

Our International Tax Lawyers represent hundreds of taxpayers annually in over 60 countries.

IRS Penalty List

The following is a list of potential IRS penalties for unreported and undisclosed foreign accounts and assets:

A Penalty for failing to file FBARs

United States citizens, residents and certain other persons must annually report their direct or indirect financial interest in, or signature authority (or other authority that is comparable to signature authority) over, a financial account that is maintained with a financial institution located in a foreign country if, for any calendar year, the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the year. The civil penalty for willfully failing to file an FBAR can be as high as the greater of $100,000 or 50 percent of the total balance of the foreign financial account per violation. See 31 U.S.C. § 5321(a)(5). Non-willful violations that the IRS determines were not due to reasonable cause are subject to a $10,000 penalty per violation.

FATCA Form 8938

Beginning with the 2011 tax year, a penalty for failing to file Form 8938 reporting the taxpayer’s interest in certain foreign financial assets, including financial accounts, certain foreign securities, and interests in foreign entities, as required by IRC § 6038D. The penalty for failing to file each one of these information returns is $10,000, with an additional $10,000 added for each month the failure continues beginning 90 days after the taxpayer is notified of the delinquency, up to a maximum of $50,000 per return.

A Penalty for failing to file Form 3520

Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts. Taxpayers must also report various transactions involving foreign trusts, including creation of a foreign trust by a United States person, transfers of property from a United States person to a foreign trust and receipt of distributions from foreign trusts under IRC § 6048. This return also reports the receipt of gifts from foreign entities under IRC § 6039F. The penalty for failing to file each one of these information returns, or for filing an incomplete return, is the greater of $10,000 or 35 percent of the gross reportable amount, except for returns reporting gifts, where the penalty is five percent of the gift per month, up to a maximum penalty of 25 percent of the gift.

A Penalty for failing to file Form 3520-A

Information Return of Foreign Trust With a U.S. Owner. Taxpayers must also report ownership interests in foreign trusts, by United States persons with various interests in and powers over those trusts under IRC § 6048(b). The penalty for failing to file each one of these information returns or for filing an incomplete return, is the greater of $10,000 or 5 percent of the gross value of trust assets determined to be owned by the United States person.

A Penalty for failing to file Form 5471

Information Return of U.S. Persons with Respect to Certain Foreign Corporations. Certain United States persons who are officers, directors or shareholders in certain foreign corporations (including International Business Corporations) are required to report information under IRC §§ 6035, 6038 and 6046. The penalty for failing to file each one of these information returns is $10,000, with an additional $10,000 added for each month the failure continues beginning 90 days after the taxpayer is notified of the delinquency, up to a maximum of $50,000 per return.

A Penalty for failing to file Form 5472

Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business. Taxpayers may be required to report transactions between a 25 percent foreign-owned domestic corporation or a foreign corporation engaged in a trade or business in the United States and a related party as required by IRC §§ 6038A and 6038C. The penalty for failing to file each one of these information returns, or to keep certain records regarding reportable transactions, is $10,000, with an additional $10,000 added for each month the failure continues beginning 90 days after the taxpayer is notified of the delinquency.

A Penalty for failing to file Form 926

Return by a U.S. Transferor of Property to a Foreign Corporation. Taxpayers are required to report transfers of property to foreign corporations and other information under IRC § 6038B. The penalty for failing to file each one of these information returns is ten percent of the value of the property transferred, up to a maximum of $100,000 per return, with no limit if the failure to report the transfer was intentional.

A Penalty for failing to file Form 8865

Return of U.S. Persons With Respect to Certain Foreign Partnerships. United States persons with certain interests in foreign partnerships use this form to report interests in and transactions of the foreign partnerships, transfers of property to the foreign partnerships, and acquisitions, dispositions and changes in foreign partnership interests under IRC §§ 6038, 6038B, and 6046A. Penalties include $10,000 for failure to file each return, with an additional $10,000 added for each month the failure continues beginning 90 days after the taxpayer is notified of the delinquency, up to a maximum of $50,000 per return, and ten percent of the value of any transferred property that is not reported, subject to a $100,000 limit.

Fraud penalties imposed under IRC §§ 6651(f) or 6663

Where an underpayment of tax, or a failure to file a tax return, is due to fraud, the taxpayer is liable for penalties that, although calculated differently, essentially amount to 75 percent of the unpaid tax.

A Penalty for failing to file a tax return imposed under IRC § 6651(a)(1)

Generally, taxpayers are required to file income tax returns. If a taxpayer fails to do so, a penalty of 5 percent of the balance due, plus an additional 5 percent for each month or fraction thereof during which the failure continues may be imposed. The penalty shall not exceed 25 percent.

A Penalty for failing to pay the amount of tax shown on the return under IRC § 6651(a)(2)

If a taxpayer fails to pay the amount of tax shown on the return, he or she may be liable for a penalty of .5 percent of the amount of tax shown on the return, plus an additional .5 percent for each additional month or fraction thereof that the amount remains unpaid, not exceeding 25 percent.

An Accuracy-Related Penalty on underpayments imposed under IRC § 6662

Depending upon which component of the accuracy-related penalty is applicable, a taxpayer may be liable for a 20 percent or 40 percent penalty

Possible Criminal Charges related to tax matters include tax evasion (IRC § 7201)

Filing a false return (IRC § 7206(1)) and failure to file an income tax return (IRC § 7203). Willfully failing to file an FBAR and willfully filing a false FBAR are both violations that are subject to criminal penalties under 31 U.S.C. § 5322.  Additional possible criminal charges include conspiracy to defraud the government with respect to claims (18 U.S.C. § 286) and conspiracy to commit offense or to defraud the United States (18 U.S.C. § 371).

A person convicted of tax evasion 

Filing a false return subjects a person to a prison term of up to three years and a fine of up to $250,000. A person who fails to file a tax return is subject to a prison term of up to one year and a fine of up to $100,000. Failing to file an FBAR subjects a person to a prison term of up to ten years and criminal penalties of up to $500,000.  A person convicted of conspiracy to defraud the government with respect to claims is subject to a prison term of up to not more than 10 years or a fine of up to $250,000.  A person convicted of conspiracy to commit offense or to defraud the United States is subject to a prison term of not more than five years and a fine of up to $250,000.

What Should You Do?

Everyone makes mistakes. If at some point that you should have been reporting your foreign income, accounts, assets or investments the prudent and least costly (but most effective) method for getting compliance is through one of the approved IRS offshore voluntary disclosure program.

Contact us Today; We Can Help You!