Minor Willful Offshore Tax Infractions
Minor Willful Offshore Tax Infractions: One of the biggest problems plaguing offshore tax law in 2020, is that anyone can write anything they want on the internet – and publish it. For the unsuspecting reader (read: you), the misinformation you find online can send you panicking down one rabbit hole and into the next.
Unfortunately, this has become a major issue in the world of IRS offshore voluntary disclosure.
Because many inexperienced attorneys believe they can somehow take a willful client, put them through the Streamlined Program, and this will miraculously cleanse the client of any international tax non-compliance misdeeds.
A few years back, we learned of a firm that tried this with an unsuspecting individual who had admitted to more experienced lawyers (including our firm) that they were willful, and that individual now lives in constant fear of being outed by the IRS.
Minor Willful Infractions are Still Willful
When a person is willful, or technically “cannot certify under penalty of perjury they are non-willful,” they no longer qualify for Streamlined Procedures, Reasonable Cause, or Delinquency Procedures.
That is because in order to qualify for any of those programs, a person has to be non-willful.
For example, if a Taxpayer knew they were supposed to report $1,500 of foreign interest income, but willfully failed to do so, they are willful.
The IRS does not parse out willful FBAR vs. willful FATCA vs. willful Tax Returns.
Rather, its all mixed into the same pot. If you were willful in one aspect of your tax life, it taints the whole submission.
This is similar to prior OVDP, in which if you had any money in a bad bank, then ALL the unreported assets became subject to the 50% penalty, and not just the money in the bad bank.
In addition, there are no de minimis exceptions to willfulness.
100% Success Rate to Bait you in
At Golding & Golding, we have submitted more than 1,000 Streamlined Submissions (not including OVDP, VDP and Reasonable Cause/Delinquency) without a single rejection — but what does that really mean?
Not much until the statue expires.
Until then, the submission is in a “holding pattern,” which is where our flat-fee, full-service benefits the client greatly.
Some of these inexperienced offshore disclosure lawyers will bait you in with a “100% success rate.”
The goal of this statement is to lure you into a feeling that you can beat the system by submitting a willful streamlined to the IRS, and avoid an audit.
Because these attorneys tout that none of their clients have been audited or rejected from the program.
In reality, the “stand-alone” Streamlined Procedures were introduced in July 2014. And, most submissions are subject to the IRC 6501 6-Year Statute of Limitations.
Therefore, a majority of streamlined submissions are still subject to potential audit.
If the IRS audits you and realizes you were willful, but still went streamlined anyway — you can end up facing criminal penalties, just like this guy did.
Inexperienced Counsel and Offshore Disclosure
The reason why this is so upsetting to more experienced counsel, is because these less-experienced attorneys are putting their clients at a major risk, without properly informing their client of the risk.
For example, if a person knows they are willful, and still submit to the streamlined program under penalty of perjury – they have made an intentional misrepresentation to the IRS.
This is tax fraud, and can be criminal.
Once the client realizes the error of their ways, oftentimes the client finds themselves in an even worse position than they were from the start.
Instead, Taxpayers should speak with experienced counsel to properly assess the facts, understand the options available — and develop a legal and ethical strategy to get the U.S. Person into offshore tax compliance.
Golding & Golding: About Our International Tax Law Firm
Golding & Golding specializes exclusively in international tax, and specifically IRS offshore disclosure.
We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe. Our attorneys have worked with thousands of clients on offshore disclosure matters, including FATCA & FBAR.
Each case is led by a Board-Certified Tax Law Specialist with 20 years of experience, and the entire matter (tax and legal) is handled by our team, in-house.
*Please beware of copycat tax and law firms misleading the public about their credentials and experience.
Less than 1% of Tax Attorneys Nationwide Are Certified Specialists
Sean M. Golding is one of less than 350 Attorneys (out of more than 200,000 practicing California Attorneys) to earn the Certified Tax Law Specialist credential. The credential is awarded to less than 1% of Attorneys.
Recent Golding & Golding Case Highlights
- We represented a client in an 8-figure disclosure that spanned 7 countries.
- We represented a high-net-worth client to facilitate a complex expatriation with offshore disclosure.
- We represented an overseas family with bringing multiple businesses & personal investments into U.S. tax and offshore compliance.
- We took over a case from a small firm that unsuccessfully submitted multiple clients to IRS Offshore Disclosure.
- We successfully completed several recent disclosures for clients with assets ranging from $50,000 – $7,000,000+.
How to Hire Experienced Offshore Counsel?
Generally, experienced attorneys in this field will have the following credentials/experience:
- 20-years experience as a practicing attorney
- Extensive litigation, high-stakes audit and trial experience
- Board Certified Tax Law Specialist credential
- Master’s of Tax Law (LL.M.)
- Dually Licensed as an EA (Enrolled Agent) or CPA
Interested in Learning More about Golding & Golding?
No matter where in the world you reside, our international tax team can get you IRS offshore compliant.
Golding & Golding specializes in FBAR and FATCA. Contact our firm today for assistance with getting compliant.