Millionaire Non-Filers at High Risk of IRS Tax Investigation

Wealthy Non-Filers are Being Aggressively Targeted

Wealthy Non-Filers are Being Aggressively Targeted

Recently, the Internal Revenue Service issued a press release identifying categories of tax filers or non-filers they intend to go after in the upcoming years for civil and criminal investigations. One of the key areas of interest of the IRS is high-income taxpayers and specifically millionaire non-filers. Each year, the IRS estimates that the tax gap continues to grow and is completely out of hand. To help combat tax non-compliance, the IRS has developed various categories which are high-priority — with a focus on wealthy Taxpayers who are causing this gap to further increase. Millionaire non-filer should carefully assess their situation and determine if they are a good candidate for the offshore or domestic tax compliance programs — before it is too late and they lose the ability to enter into one of the disclosure programs.

What the IRS Says About Millionaire Non-Filers

As provided by the IRS:

• • • “The IRS continues to intensify work around wealthy individuals who do not file tax returns. These are particularly egregious cases where instead of filing their taxes and paying their fair share, these people used the money to make lavish purchases. In one recently closed case, an individual used funds owed to the government to buy a Maserati and a Bentley. We will continue to work with our law enforcement partners to hold these individuals accountable. “

What Should Millionaire Non-Filers Do?

First, it is important to take a deep breath and not act hastily.

There are various reasons why a millionaire may not have filed their tax returns, whether it is due to a misunderstanding of US tax laws or simply confusion as to what is considered income and what is considered taxable income. Depending on whether the millionaire non-filer is willful or non-willful there are many different offshore and domestic disclosure opportunities available including the IRS Voluntary Disclosure Program, Streamlined Procedures, Qualified Amended Returns, and Reasonable Cause.

It is a big step for the millionaire non-filer to reach out to the Internal Revenue Service and each case is different. Taxpayers should consider speaking with a Board-Certified Tax Law Specialist who specializes exclusively in the area of tax they require before making any representation to the IRS — or retain the first attorney that may scare them into believing they were automatically criminal.

Current Year vs Prior Year Non-Compliance

Once a taxpayer missed the tax and/or reporting (such as FBAR and FATCA) requirements for prior years, they will want to be careful before submitting their information to the IRS in the current year. That is because they may risk making a quiet disclosure if they just begin filing forward in the current year and/or mass filing previous year forms without doing so under one of the approved IRS offshore submission procedures. Before filing prior untimely foreign reporting forms, taxpayers should consider speaking with a Board-Certified Tax Law Specialist that specializes exclusively in these types of offshore disclosure matters.

Avoid False Offshore Disclosure Submissions (Willful vs Non-Willful)

In recent years, the IRS has increased the level of scrutiny for certain streamlined procedure submissions. When a person is non-willful, they have an excellent chance of making a successful submission to Streamlined Procedures. If they are willful, they would submit to the IRS Voluntary Disclosure Program instead. But, if a willful Taxpayer submits an intentionally false narrative under the Streamlined Procedures (and gets caught), they may become subject to significant fines and penalties. 

Need Help Finding an Experienced Offshore Tax Attorney?

When it comes to hiring an experienced international tax attorney to represent you for unreported foreign and offshore account reporting, it can become overwhelming for taxpayers trying to trek through all the false information and nonsense they will find in their online research. There are only a handful of attorneys worldwide who are Board-Certified Tax Specialists and who specialize exclusively in offshore disclosure and international tax amnesty reporting. 

Golding & Golding: About Our International Tax Law Firm

Golding & Golding specializes exclusively in international tax, specifically IRS offshore disclosure. 

Contact our firm today for assistance.