Foreign Account & Asset Amnesty Disclosure Before Filing 2018 Taxes?
A common question we received around tax time, is:
“Should I file 2018 taxes first and then get into compliance, or get into offshore compliance first, and then file a compliant 2018 tax return?”
Do Not File 2018 Before Getting Into Compliance
If you go ahead and file your 2018 taxes before getting into compliance, you may be setting yourself up for serious IRS penalties.
Why? Because by submitting your 2018 taxes before getting into compliance (or simultaneously depending on your chosen strategy) you may have committed a Quiet Disclosure.
What is a Quiet Disclosure?
A quiet disclosure occurs when a person knowingly submits a tax return to the IRS, without including the necessary offshore/foreign accounts, assets, investments and/or accounts in the current or prior years.
Common Examples of Quiet Disclosure
– Submitting 2018 taxes without first getting into compliance
– Submitting 2018 taxes without including the current year foreign information, because the taxpayer is waiting to file the prior returns first (This is considered “fraud” since it intentionally omits the current year foreign/offshore information).
– Submitting 2018 taxes, which includes the current year foreign information, but does not yet get into compliance (This is considered “fraud” since it intentionally omits the prior foreign/offshore information).
Another common question we receive is about “placeholder” submissions. In other words, the taxpayer sends the IRS a notice of intent letter, that the taxpayer plans on getting into compliance.
This is a terrible idea, because all the taxpayer is really doing is letting the IRS know that he or she is out-of-compliance — when the individual may not yet be on the IRS’ radar.
*Even the IRS themselves has advised against submitting “placeholder” submissions.
Beat the IRS to the Punch!
One of the best and safest methods for limiting, reducing, and even avoiding some or all of potential IRS offshore penalties is by submitting to one of the IRS Amnesty programs.
But. if the IRS audits or examines you first — you generally lose the right to submit — so you are under a bit of a time-crunch.
Golding & Golding, Board Certified in Tax Law
We have successfully represented clients in more than 1,000 streamlined and voluntary disclosure submissions nationwide and in over 70-different countries.
Golding & Golding is the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe.
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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. He has also earned the prestigious IRS Enrolled Agent credential. Mr. Golding's articles have been referenced in such publications as the Washington Post, Forbes, Nolo, and various Law Journals nationwide.