Quiet Disclosure vs. Streamlined – Comparing IRS Offshore Programs
Quiet Disclosure vs. Streamlined: With Quiet Disclosure vs. Streamlined, a Taxpayer is comparing to IRS offshore submission options. The First Option is the a Quiet Disclosure, which is illegal and may result in criminal fines and penalties, The second option is is the Streamlined Filing Compliance Procedures, aka IRS Streamlined, aka “Streamlined,” which is a safe, legal and much less painless option.
Quiet Disclosure vs. Streamlined
What is Quiet Disclosure vs. Streamlined, and what is the difference?
Quiet Disclosure to the IRS
With either a Quiet Disclosure or IRS Streamlined submission, Taxpayer submits tax returns along with international reporting forms, to disclose accounts and assets such as FATCA Assets, FBAR Accounts, and PFIC Investments,
With a Quiet Disclosure, the Taxpayer files prior year Tax Returns and Informational Reporting Forms (or just begins filing forward) without going through the proper amnesty programs channels.
In the alternative, Streamlined or IRS Streamlined is one of the more common and legal methods for foreign account and asset disclosure.
IRS Quiet Disclosure FBAR & FATCA
The rules involving offshore voluntary disclosure have changed drastically since this article was originally published.
Since then, four major issues impacting offshore voluntary disclosure, include:
- FATCA and FBAR enforcement has increased
- The standard for “FBAR willfulness” keeps getting lower
- Streamlined Disclosure may soon be over, and
- Increased pursuit of criminal enforcement of non-compliance
And, with the introduction of the New Updated IRS Voluntary Disclosure Procedures (Domestic and Offshore) and modified penalty structure (good and bad) — Voluntary Disclosure should also be considered.
We are providing links to separate “Stand-Alone” articles to best assist you in making an informed decision.
Resources for Streamlined Procedures
Resources for Quiet Disclosure
- General Article about IRS Silent Disclosures and Why they are Bad
- Specific Article on FBAR Silent Disclosures
- 10 Reasons Not to File a Silent Disclosure with the IRS
Quiet Disclosure Alternatives
There are 5 main versions of the program. In addition, there is an “illegal” version of Voluntary Disclosure as well, which is referred to as “Quiet Disclosure” or “Silent Disclosure.”
Here are the 5 Main Options:
(New) Updated Traditional IRS Voluntary Disclosure Program
When OVDP (Offshore Voluntary Disclosure Program) ended back in September 2018, the Internal Revenue Service was unclear as to whether a New “Offshore” Voluntary Disclosure Program would be introduced. Instead of a “new program,” the traditional voluntary disclosure program was expanded.
You can use the disclosure program to submit FBARs for your Foreign Bank Accounts, FATCA, PFIC, along with your Domestic Income
SFCP – IRS Streamlined Filing Compliance Procedures
IRS Streamlined Filing Compliance Procedures are a stand-alone “streamlined” version of the traditional OVDP. The “stand-alone” streamlined filing procedures were created in 2014 by the Internal Revenue Service.
The purpose of the procedures are to assist taxpayers who were noncompliant with offshore reporting requirements – but were also non-willful.
If the Taxpayer can certify under penalty of perjury of being non-willful, the IRS reduces the penalty structure, and even waives the penalty for applicants who qualify as foreign residents.
SDOP – IRS Streamlined Domestic Offshore Procedures
SDOP is the Streamlined Domestic Offshore Procedures, and it is the program designed for for U.S. persons residing in the United States (or do not meet the technical “Foreign Resident Test”)
SFOP – IRS Streamlined Foreign Offshore Procedures
SFOP is the Streamlined Foreign Offshore Procedures. These are the Procedures for U.S. persons residing outside the United States is referred to as the Streamlined Foreign Offshore Procedures.
DIRP – Delinquency Procedures for Offshore & Foreign Accounts and Assets
If you do not have any unreported income resulting in having to amend your tax returns — and all you have is unreported foreign assets, accounts or investments with no unreported income, you may be in luck. In these instances, in which you do not otherwise need to file for traditional offshore disclosure or the Streamlined Filing Compliance Procedures — you may qualify for the Delinquency Procedures and avoid any penalties.
RC – Reasonable Cause for Offshore & Foreign Accounts and Assets
Reasonable Cause may be an option for some taxpayers. Specifically, if you were completely non-willful in your failure to disclosure, and were unaware that there was any reporting requirement, then the thought of paying any penalty may sound absurd.
Fixing Lesser Experienced Law Firm mistakes.
IRS Voluntary Disclosure is complex enough for experienced practitioners who focus exclusively in the area of law, never mind relative newcomers who are trying to handle more than just offshore voluntary disclosure as part of their everyday tax practice.
We know, because those cases usually end up on our door-step.
Hiring an IRS Offshore Disclosure Attorney
People Can be Whomever They Want to be Online
And that is the problem.
In recent years, we have had many clients come to us after being horribly represented by inexperienced tax counsel. While we are sure it is a problem in many fields, it seems to run rampant in IRS offshore voluntary disclosure.
These Attorneys ‘manipulate’ their past legal experiences, such as working for the IRS — to make themselves sound more experienced than they are. You later find that they never worked as an attorney for the IRS, or even in the offshore disclosure department.
The IRS has nearly 100,000 employees, and just being one of them does not make an attorney qualified to be an effective and experienced offshore voluntary disclosure tax attorney specialist.
IRS Offshore Disclosure is complex enough for experienced practitioners who focus exclusively in the area of law, never mind relative newcomers who are trying to handle more than just offshore voluntary disclosure as part of their everyday tax practice.
We know, because those cases usually end up on our door-step. Examples of recent cases we had to takeover from less experienced Attorneys can be found by Clicking Here (Case 1) and Clicking Here (Case 2).
How to Find Experienced & Reputable Counsel
Nearly all the experienced Attorneys in this field will have 5 Main Attributes:
- Board Certified Tax Law Specialist
- Master’s of Tax Law (aka LL.M.)
- Dually Licensed as an Enrolled Agent or CPA
- Around 20-Years of Private Practice experience
- Extensive Litigation, Trial and related high-stakes experience.
Understanding How Tax Prep & Legal Fees Work in Offshore Disclosure
Offshore Disclosure — Flat-Fee, Full-Service
All Non-Willful cases should be Flat-Fee, Full-Service for both Tax and Legal.
*If you were willful, the submission and analysis is much different depending on whether the IRS has contacted you yet, if you are under investigation, etc. — and you should speak with experienced counsel.
Need a Second Opinion?
Lately, with rumblings of the Streamlined Disclosure Program, aka Streamlined Voluntary Disclosure aka Streamlined Filing Compliance Procedures coming to an end, some younger and inexperienced attorneys are in disarray — and handing out terrible advice to make a quick buck — and putting clients at risk.
If you are unsure about advice you received about Reasonable Cause or the Streamlined Disclosure program, let Golding & Golding offer you a second opinion, with a reduced-fee initial consultation.
Contact Us Today; Let us Help You.
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, and has also earned the prestigious Enrolled Agent credential. Mr. Golding is also a Board Certified Tax Law Specialist Attorney (A designation earned by Less than 1% of Attorneys nationwide.)