OVDP Attorney Fees – IRS Representation by Experienced Tax Counsel
- 1 OVDP Attorney
- 2 OVDP Lawyer Credentials
- 3 Golding & Golding, A PLC
- 4 We Take OVDP Representation Very Seriously
- 5 Offshore Disclosure – Attorney vs. CPA
- 6 OVDP is Quasi-Criminal
- 7 IRS Streamlined Offshore Comes with Risk
- 8 Attorney-Client Privilege
- 9 5 Reasons to Choose an Attorney for OVDP
- 10 Want to Learn More about Offshore Voluntary Disclosure?
If you are going to enter OVDP, you should retain an experienced OVDP Attorney.
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.
OVDP Lawyer Credentials
**Tax Law is a specialized area of law, and Offshore Disclosure is especially complex. Your OVDP or Streamlined Attorney should have:
- At least 15 years of experience as a practicing lawyer
- An advanced Master’s of Tax Law Degree (LL.M.); and
- Either a CPA or Enrolled Agent (EA) license.
While a sole Attorney practitioner may offer a reduced rate, if they are not handling the tax preparation as well as the legal portion of the representation (including signing their own name) to the Tax Return and Legal Submission, then you have to wonder who is going to be handling that portion of the submission. Will you even get the chance to interview the CPA beforehand and work with them during the process?
Likewise, if the firm advertises or markets themselves as a Tax Resolution Firm that also handles OVDP or Offshore Voluntary Disclosure, you have to question how much experience they really have in OVDP, Streamlined, FATCA and FBAR compliance.
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 over $35,000,000.00 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
The only way to really know if the IRS believes you are non-willful is either to outlive the Statute of Limitations, or survive an Audit.
Non-willfulness usually becomes an issue when either a person is audited under the Streamlined Program, or wants to opt-out of OVDP. With either one of these two options there are significant risks, which could include a criminal investigation and possible issues involving a work visa or legal permanent resident status – these are not issues to play around with.
The only way to ensure confidentiality is by retaining an Attorney.
And, because many of our clients who came to us from CPA firms have 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.
OVDP is Quasi-Criminal
OVDP is the Offshore Voluntary Disclosure Program. It is a program designed for individuals who are willful (aka knowingly evaded or avoided filing taxes or reporting foreign income). If you are in OVDP and want to try to opt-out to avoid a larger penalty due to mitigating factors (for example, an inexperienced CPA or Attorney goaded you into OVDP when you were actually non-willful) you will be dancing around issues involving tax fraud and tax evasion, which are “criminal” in nature; thus, you will want an attorney to represent you throughout the entire submission process.
IRS Streamlined Offshore Comes with Risk
The main risk is that you may still be audited. And despite what some inexperienced attorneys will tell you (Read: Less than 15 years attorney experience and no real litigation experience) is that “everyone gets approved under the Streamlined Program.” That is incorrect, and that reasoning alone can take you down a very unsettling path with an Attorney who is not equipped to properly represent you.
Likewise, if you are audited and only used a CPA for representation, there is no Attorney-Client privilege with the CPA.
There is no attorney-client privilege between a Client and CPA, and while there is some form of an Accountant-Client privilege, it pales in comparison to the level of confidentiality contrast that you receive with an attorney. Since your freedom is on the line, you want (Read: Need) that confidentiality.
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.