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Offshore Amnesty Program – IRS Offshore Amnesty Program 2019

Offshore Amnesty Program - IRS Offshore Amnesty Program 2019 - Golding & Golding

Offshore Amnesty Program – IRS Offshore Amnesty Program 2019 – Golding & Golding

Offshore Amnesty Program – IRS Offshore Amnesty Program 2019

IRS Offshore Amnesty: By making an IRS Offshore Amnesty Disclosure, you will reduce or avoid IRS, FBAR & FATCA fines & penalties.

Offshore Amnesty Program

We have worked with thousands of clients, and submitted more than 1000 IRS Offshore Amnesty Disclosures to the IRS.

There are several benefits to making a disclosure, which include:

  • Reduced Offshore Penalties
  • Peace of Mind
  • A Clean record with the IRS
  • Avoiding Quiet or Silent Disclosures going forward

Each and every client would tell you they were better off (mentally and emotionally) after successfully completing the different programs.

5 Common Questions we Receive about IRS Offshore Amnesty

Here are some of the more common questions (and answers) about offshore amnesty:

Is There an IRS Amnesty Program?

Yes. There are multiple IRS Amnesty Programs, depending on the facts and circumstances of your situation – you may qualify for one or more programs.

What is the Offshore Voluntary Disclosure Program (OVDP)?

OVDP was a program used to disclose offshore (and domestic) assets, income, accounts and investments. OVDP has been discontinued, but the IRS did update and expand the “traditional” voluntary disclosure program.

What is the Streamlined Filing Compliance Procedures (SFCP)?

The Streamlined Filing Compliance Procedures is a form of IRS Amnesty used to assist taxpayers who were non-willful. SFCP can be broken down further into: Streamlined Domestic and Streamlined Foreign.

What is a Quiet Disclosure?

A Quiet Disclosure is an illegal submission to the IRS, outside of the accepted Amnesty Programs — in which a person either begins to “file forward,” or “mass file” previous years returns and FBARs.

If the IRS catches you, it may lead to significant fines, penalties, and even a criminal investigation.

What Happens if You File the FBAR Late?

If you file an FBAR Late, but use one of the approved Offshore Amnesty programs, you can reduce, minimize, or even avoid FBAR Penalties. If you do not use one of the programs, but instead file a quiet disclosure (and get caught), the IRS has let it be known that they will seek to enforce all penalties.

5 Benefits of an IRS Offshore Amnesty using the “Traditional Voluntary Disclosure Practice”

Severely Reduce the Chance of Audit or Investigation

For some highly risk averse non-willful clients, the fear and concern of an audit is too much to bear — and the client prefers to make a voluntary disclosure instead of a streamlined disclosure.

Unlike the Streamlined Program, with the traditional voluntary disclosure program, you will almost always avoid an IRS Audit, Examination or Investigation.

When an attorney tells you that IRS Offshore Amnesty is only for people who are “Willful” or need “Criminal Protection” – then they do not understand how offshore amnesty works (despite what they may market on their website).

It doesn’t matter if they “used to work for the IRS,” or are full of gray hair (or no hair) —

IRS Domestic and Offshore Enforcement has Become More Intensified

The IRS is limited on resources, and therefore has to allocate their resources accordingly. The IRS has increased enforcement of offshore penalties (and unlike other penalties, the penalties for offshore accounts & assets can be severe).

Some of the main enforcement initiatives, include:

  • Offshore Compliance
  • Domestic Tax Fraud
  • Employment Tax

By entering the IRS Voluntary Disclosure Program, you can minimize any potential damaging issues in the future – which can impact your business and career prospects and nearly eliminate any chance of future examination (on these issues).

The IRS Penalties Continue to Increase

In recent years, the IRS has increased penalties. Currently, under the new version (which is an updated “older version”), the baseline penalties have changed (and may possibly be negotiated).

  • 50% Maximum Balance on accounts 
  • 75% on Highest Years’ tax liability
  • Possible Waiver on Informational Returns

You Don’t Have to Guess at Willful vs. Non-Willful

You are non-willful if you were unaware of any reporting requirement and/or relied upon a CPA, Enrolled Agent, Accountant, or Tax Preparer who was unaware of any reporting requirement – but recent changes in the law may limit the ability to rely upon an “uninformed CPA.”

You are willful if you knew or should have known you were supposed to report and disclose your foreign income and assets but choose not to.

Willfulness does not require intent — it includes the lower standards of  Reckless Disregard or “WillfulBlindness.

It is crucial that if you were willful, you do not submit to the Streamlined Program — even if some unethical, or junior attorneys try to get you do it anyway.

For more on this topic, click here: The IRS OVDP Willfulness Dilemma – Penny Wise & Pound Foolish.

No Continuing Quiet Disclosure

While the penalties associated with some options (IRM Voluntary Disclosure aka Post-OVDP) are worse than other options (Streamlined or Reasonable Cause) – you should never quietly begin filing going forward (aka Filing Forward or Silent Disclosure).

That is always the worst option of all.

Filing forward is when you begin reporting your offshore and foreign accounts for prior years without first getting into offshore compliance using proper methods.

If you just begin to report your foreign accounts “going forward” instead of going back and making an Offshore Amnesty submission – you have committed a tax crime.

How is that a Crime?

Because you have intentionally omitted key information (prior year account information) instead of making an amnesty/voluntary disclosure. As a result, you have made false representations (via intentional omissions), which is a crime.

These crimes may include (but not limited to):

  • Tax Fraud
  • Tax Evasion
  • Civil or Criminal Willfulness
  • FBAR Crime
  • FATCA Crime

You Need an Attorney and Law Firm that is Highly-Experienced

We have successfully more than 1000 offshore Disclosures — including complex issues involving FATCA, PFIC, CFC, Foreign Mutual Funds, and more.

Some less experienced attorneys will rely on issuing a  “Kovel Letter” (since they do not have the tax experience needed to represent you) but it puts your confidentiality at risk.

The area of law is always changing, and due to recent updates in the law, including changes to various international tax agreements, regulations, statutes, and enforcement procedures — oftentimes even a “simpler” FBAR disclosure becomes an incredibly complicated process. 

Golding & Golding is a full-service International Offshore Disclosure Law Firm and Tax Firm specializing exclusively in OVDP and Offshore Disclosure maters.

We routinely represent clients in:

  • FATCA
  • FBAR
  • PFIC
  • Offshore Assets
  • Offshore Investments
  • Offshore Income
  • Offshore Accounts
  • Foreign Businesses
  • Foreign Life Insurance
  • Foreign Cryptocurrency
  • Foreign Real Estate
  • Foreign Gifts
  • Foreign Inheritance
  • International Tax Investigations
  • Tax Treaty Analysis
  • “Cross-Border” issues

Golding & Golding is led by a Board Certified Tax Law Specialist (less than 1% of Attorneys nationwide) who practices exclusively in Offshore Disclosure.

We represent clients nationwide and worldwide in nearly 70-countries with all aspects of OVDP (IRS Offshore Voluntary Disclosure Program).

5 Easy Ways to Vet Out IRS Offshore Disclosure Attorneys

Offshore disclosure is like a puzzle. And, you need all the pieces of the puzzle to complete the task at hand. 

There is a reason why the top tax attorneys nationwide in IRS Offshore Disclosure generally will have five (5) main qualifications:

  • Board Certified Tax Law Specialist (less than 1% of attorneys nationwide)
  • Enrolled Agent or CPA status
  • LL.M. (Masters in Tax)
  • Litigation & Trial Experience
  • A Firm that Specializes Exclusively in IRS Offshore Disclosure

Hiring an Offshore Disclosure Lawyer – 5 Types of Lawyers to Avoid

Beware of Copycat Law Firms

Unlike other attorneys who call themselves specialists or experts in Voluntary Disclosure but are not “Board Certified,” handle 5-10 different areas of tax law, purchase multiple keyword specific domain names, and even practice outside of tax, we are absolutely dedicated to Offshore Voluntary Disclosure.

*Click here to learn the benefits of retaining a Board Certified Tax Law Specialist with advanced tax credentials.

IRS Penalty List

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

Failure to File

If you do not file by the deadline, you might face a failure-to-file penalty. If you do not pay by the due date, you could face a failure-to-pay penalty. The failure-to-file penalty is generally more than the failure-to-pay penalty.

The penalty for filing late is usually 5 percent of the unpaid taxes for each month or part of a month that a return is late. This penalty will not exceed 25 percent of your unpaid taxes. If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.

Failure to Pay

f you do not pay your taxes by the due date, you will generally have to pay a failure-to-pay penalty of ½ of 1 percent of your unpaid taxes for each month or part of a month after the due date that the taxes are not paid. This penalty can be as much as 25 percent of your unpaid taxes. If both the failure-to-file penalty and the failure-to-pay penalty apply in any month, the 5 percent failure-to-file penalty is reduced by the failure-to-pay penalty.

However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax. You will not have to pay a failure-to-file or failure-to-pay penalty if you can show that you failed to file or pay on time because of reasonable cause and not because of willful neglect.

Civil Tax Fraud

If any part of any underpayment of tax required to be shown on a return is due to fraud, there shall be added to the tax an amount equal to 75 percent of the portion of the underpayment which is attributable to fraud.

A Penalty for failing to file FBARs

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.

A Penalty for failing to file Form 8938

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

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

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

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

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

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

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.

4 Types of IRS Voluntary Disclosure Programs

There are typically four types of IRS Voluntary Disclosure programs, and they include:

Contact Us Today; Let us Help You.

International Tax Lawyers - Golding & Golding, A PLC

International Tax Lawyers - Golding & Golding, A PLC

Golding & Golding: Our International Tax Lawyers practice exclusively in the area of IRS Offshore & Voluntary Disclosure. We represent clients in 70 different countries. Managing Partner, Sean M. Golding, JD, LL.M., EA and his team have represented thousands of clients in all aspects of IRS offshore disclosure and compliance during his 20-year career as an Attorney. Mr. Golding's articles have been referenced in such publications as the Washington Post, Forbes, Nolo and various Law Journals nationwide.

Sean holds a Master's in Tax Law from one of the top Tax LL.M. programs in the country at the University of Denver, and has also earned the prestigious Enrolled Agent credential. Mr. Golding is also a Board Certified Tax Law Specialist Attorney (A designation earned by Less than 1% of Attorneys nationwide.)
International Tax Lawyers - Golding & Golding, A PLC