Pros & Cons of Making an IRS Streamlined Procedure Submission
Streamlined Filing Lawyers (Domestic & Foreign): Our International Tax team of Streamlined Filing Lawyers represent clients worldwide in over 70-countries. The are many pros (and some cons) to making a Streamlined Procedure submission.
The Streamlined Procedure, is a procedure used to report foreign accounts, investments, accounts, and income to the IRS.
- Foreign Accounts
- Foreign Assets
- Foreign Investments
- Foreign Income
- Life Insurance
- Mutual Funds
- Foreign Corporations
- Foreign Partnerships
Here are some of the main benefits for submitting to the streamlined program:
Pros of Making a Streamlined Procedure Submission
Less paperwork than OVDP/VDP
Unlike traditional OVDP, the submission process for the streamlined offshore procedures is handled in one fell swoop. You only have to submit three years of amended returns instead of eight years of amended returns as required by OVDP. Moreover, you only have to submit six years of FBARs instead of eight years of FBARs.
Streamlined has a Reduced Penalty
The penalty for the streamlined program is much different. First, if you qualify as a foreign resident — penalties are waived. But, presuming that you do not meet the strict definition of foreign resident for the streamlined program, the penalty is still relatively light in comparison to traditional OVDP. The penalty is only 5% of the highest year-end balance for the six-year compliance period (not all six years, just one year). Moreover, certain assets that are penalized under traditional OVDP are not penalized under the Streamlined Program.
The Risk of Audit is Not Exceedingly High
While the IRS has the opportunity to still audit you under the streamlined program, the IRS is understaffed and therefore the chances of being audited under the program are not necessarily any higher than they would be for you if your were to be audited outside of the program. In other words, by entering the program — you reduce your penalties significantly, without necessarily increasing your chance of audit.
No Representation of Willfulness
A common question we receive is whether a submission to offshore disclosure will impact work visa or legal permanent residency status. Generally it will not impact immigration status, since you are not making any affirmative representation that you were willful.
Cons of Making a Streamlined Procedure Submission
There is no audit protection
If the IRS wants to, they can still audit you. While submitting to the Streamlined Program does not actually increases your chance of audit, just do not get “protection” against an IRS audit on International Tax issues as you do with OVDP.
There is No Criminal Protection
The IRS can still pursue a criminal investigation against you.
There is No Firm (Black-Letter Law) Definition of “Willfulness”
Willfulness comes in various shapes and sizes. It can mean intent, knowledge, willful blindness, reckless disregard, etc. In other words, just because you believe you are not willful does not mean the IRS will agree or accept your fact.
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.