OVDP Attorney – Offshore & Foreign Account Reporting | FBAR & FATCA
OVDP Attorney – Offshore Compliance | Foreign Account Reporting
What is an OVDP Attorney?
An OVDP Attorney is an International Tax Lawyer who focuses their entire law practice on Offshore Voluntary Disclosure Issues. Typically, OVDP matters include:
- Foreign and Offshore Accounts
- Foreign and Offshore Investments
- Foreign and Offshore Assets
- Foreign and Offshore Income
- FATCA Penalties
- FBAR Penalties
- Foreign Trusts
- PFIC, CFC & Other related issues
OVDP Attorney Credentials
Experienced IRS Offshore Disclosure Representation is crucial for a successful OVDP disclosure. There are only a handful of Law Firms that focus their entire tax practice on IRS Offshore Voluntary Disclosure (We are one of them!). We have represented several hundred clients in OVDP, Streamlined and Offshore Disclosure.
You will want to make sure you use an OVDP Attorney who has:
- Litigation Experience
- IRS Audit Experience
- At Least 15-20 years of Attorney Experience
- An advanced Master’s of Tax Law Degree (LL.M.); and
- Either a CPA or Enrolled Agent (EA) license.
Why? Because you never know how the OVDP or Streamlined submission will go. Sometimes, a person is already under IRS investigation and may not know it. Then, when the person submits to OVDP they are rejected. In this type of situation, you need an Attorney with all the above required experience.
Using a CPA or Junior Attorney with no real experience, is not going to help (and you will then realize why the fees they charged were so low). We know this, because each year we receive many inquiries from clients seeking to retain our services after their initial OVDP or Streamlined junior tax attorney (without the experienced mentioned above) flubbed their submission and made numerous mistakes in the submission process.
Alternatively, once you are in OVDP, you may want to:
- Make an MTM Election
- Argue FAQ 55 Penalty Reductions
As a result, for this highly specialized area of law, you need an OVDP Attorney who is experienced specifically in OVDP, but also has the background and experience to fight on your behalf.
OVDP Attorney Fees
If you receive an OVDP Fee Quote from a CPA or Attorney that seems too Low…you should be careful.
That is not to say you should resign yourself to mortgaging your house for representation, but there are many CPAs and Attorneys who see a frightened human being as little more than a “Mark” or “Target.”
They will provide artificially low fee quotes to bait you in, only to request more money down-the-line. Most of the these Attorneys do not have real experience, and do not understand the comprehensive nature of an OVDP.
Golding & Golding, A PLC
At Golding & Golding, we have successfully handled numerous OVDP (Offshore Voluntary Disclosure Program) and IRS Streamlined Program applications for individuals and businesses around the globe with outstanding unreported foreign accounts ranging from $50,000.00 to nearly $40,000,000.00 in a single disclosure.
In order to assist you to better understand the distinction between the two different IRS offshore/foreign account disclosure programs, we are providing the following summary for your reference.
We Take OVDP Representation Very Seriously
The main takeaway from this article is that you understand the risks and pitfalls of entering either over OVDP or the Streamlined Offshore Disclosure Program unprepared.
We are passionate about representing individuals in offshore voluntary disclosure matters, and feel horrible when a client calls us after having hired an inexperienced Attorney or CPA who either did a sloppy job, charged them more money than they agreed upon, and/or is overall not providing the level of representation a person deserves.
Offshore Disclosure – Attorney vs. CPA
Many clients contact us after having used a CPA firm, and let us know they had been misinformed by a CPA as to the difference between what services a CPA can provide, and the scope of the Accountant-Client vs. Attorney-Client privilege, we will take this opportunity to explain the difference in the two main programs (OVDP vs. Streamlined) and the difference in scope of representation between an Attorney and a CPA.
5 Reasons to Choose an Attorney for OVDP
Here are five reasons why you have to be careful if you are not going to use an attorney:
The Attorney-Client privilege is fascinating. It is an incredible privilege that allows an individual to be completely truthful (aside from telling your attorney that you are about to go kill someone or inflict serious bodily harm) with his or her attorney. This allows the attorney to most effectively represent a client by knowing the facts and circumstances of the case. It also allows the Client to be ‘honest’ with the attorney, without fear that the attorney is going to have to tell the police or IRS special agents what the client may have told the attorney.
You do not receive this privilege with the CPA. There is a accounting-client privilege available between the CPA and client, but it does not rise anywhere near to the level of an attorney client privilege.
CPAs are Not Trained in Legal Analysis and Representation
Attorneys are required to complete an additional three years of law school as well as pass the bar exam. Moreover, many attorneys in the area of tax law achieve a Masters of Tax Law as well as earn additional credentials such as Enrolled Agent. An Enrolled Agent is a credential earned from the IRS (the reason most people have not heard of the credential is because it is relatively difficult to obtain and required the passing of a 3-part IRS Administered “Enrolled Agent” exam).
While an Enrolled Agent status reflects extensive knowledge in Tax Law, many CPAs have never practiced in the realm of tax (as opposed to accounting or financial auditing).
Many CPAs are highly qualified and we have the utmost respect for most CPAs (we use CPA’s in situations that require very complex forensic accounting and related matters). With that said, since OVDP and the Streamlined Program require comprehensive legal evaluation and analysis, along with a strong understanding of the legal ramifications involving willful versus non-willful, it is important to have an attorney representing you throughout the process.
Most CPAs have no Audit, Litigation or Trial Experience
Whether you decide to enter OVDP and then opt-out (a decision in which you do not have to make until the very end of the process) or enter the Streamlined Program (in which you may be audited), it is important to have a representative who has been through audits and/or litigation and trials in the past. Most CPAs have never seen the inside of Tax Court and/or cannot practice as an attorney — and therefore do not have any litigation experience.
As such, chances are without this experience it will not be in the best position two prepare the certification statement and/or represent you before the IRS.
Improper Advice (Designed to Artificially Reduce Their Fees)
When we are contacted by potential clients who have already spoken to CPAs beforehand, they are generally misguided. Since the CPAs are trying to keep the cost down in order to compete with the attorneys and the complete lack of an attorney-client privilege, the information they are providing to potential clients is often wrong.
Examples of the common misinformation we hear include:
- Low Audit Risk: “You will never be audited under the streamlined program.”
- PFIC Form 8621: “Don’t worry about form 8621, there are no penalties if you don’t file it”
- Foreign Retirement: “It sounds like a 401(k), so it is tax-deferred in the US as well and doesn’t need to be reported.”
The above referenced examples all have one common theme: the CPA is trying to reduce the fees to obtain your business by limiting the amount of work and providing inaccurate information regarding the amount of work that needs to be done. The fact of the matter is:
- It is impossible to know if you will be audited
- Failing to file Form 8621 can lead to your Tax Return remaining open indefinitely; and
- The general rule is Foreign Retirement does not receive the same tax deferred treatment as a 401K.
Just Hire an Attorney When you are Audited
Sure, you can start out by hiring a CPA, paying them $10,000+ in fees to handle the program. But, if you are audited down the line and/or decide you’d like to opt-out, you will want an attorney to represent you because you want the attorney-client privilege — as well as a trained legal professional having your back during situations which could turn into quasi-criminal investigations.
If you wait to hire an attorney down the line, just know that the attorney is going to have to go back and learn the entire file, and so the fees the attorney would charge at that time will be significantly higher then if you would have hired an attorney from the beginning to handle these matters for you, due to the lack of Attorney-Client privilege (a fact the CPA does not usually tell you upfront).
Want to Learn More about Offshore Voluntary Disclosure?
Offshore Voluntary Disclosure Tax law is very complex. There are many aspects that go into any particular tax calculation, including the legal status, marital status, business status and residence status of the taxpayer.