Voluntary Disclosure Attorney (IRS Foreign Reporting Tax Law Specialist) - Golding & Golding

Voluntary Disclosure Attorney (IRS Foreign Reporting Tax Law Specialist) – Golding & Golding

Voluntary Disclosure Attorney (IRS Foreign Reporting Tax Law Specialist)

In recent years, the IRS has been gaining more and more momentum, and honing their skills and resources towards enforcing offshore and foreign money compliance requirements.

If you are out compliance, and considering retaining a Voluntary Disclosure Attorney to get you into compliance, you should find a Tax Attorney experienced in IRS Foreign Reporting.

You should retain an Attorney who both specializes in IRS Voluntary Disclosure, and is also a Board Certified Tax Law Specialist (less than 1% of Attorneys nationwide)

IRS Voluntary Disclosure

We understand that IRS Voluntary Disclosure law can be daunting, overwhelming, and downright confusing. It is not the type of law an Attorney dabbles in, or tries to posture that they are specialists.

We focus our entire law practice on the IRS Offshore and Foreign Reporting of Income, Assets, Accounts and Investments.

*The IRS uses the terms Offshore, Foreign and International interchangeably.

IRS Offshore Disclosure is a Specialty

Most experienced IRS Voluntary/Offshore Disclosure Lawyers will have:

  • Around 20 years Attorney Practice experience representing their own clients as Lawyers
  • Completed a Master’s Degree in Tax (LL.M.)
  • Achieved either the Enrolled Agent Credential (EA) or are a licensed CPA
  • Preferably a Board Certified Tax Law Specialist (Less than 1% Nationwide)

Sean M. Golding, JD, LL.M., EA – Certified Tax Law Specialist

Our Managing Partner, Sean M. Golding, JD, LLM, EA is the only Attorney nationwide who has earned the Certified Tax Law Specialist credential and specializes in IRS Offshore Voluntary Disclosure Matters.

In addition to earning the Certified Tax Law Certification, Sean also holds an LL.M. (Master’s in Tax Law) from the University of Denver and is also an Enrolled Agent (the highest credential awarded by the IRS.) 

He is frequently called upon to lecture and write on issues involving IRS Offshore Voluntary Disclosure.

Less than 1% of Tax Attorneys Nationwide

Out of more than 200,000 practicing attorneys in California, less than 400 attorneys have achieved this Certified Tax Law Specialist designation.

The exam is widely regarded as one of (if not) the hardest tax exam given in the United States for practicing Attorneys. It is a designation earned by less than 1% of attorneys.

*Click Here to Learn about how Attorneys falsely market their services as “specialists.”

Our Clients Have Asked Us, to Warn You!

About 15% of our clients come to us after having first went to a less qualified Voluntary Disclosure lawyer first, that baited them in with artificially low fees.

Our clients have told us over and over again, that they wish they had known these issues prior to retaining their initial attorney.

We want to help.

1. Research Voluntary Disclosure Before Contacting an Attorney

Spend lots of time reading quality articles. Avoid general practitioners, or attorneys who practice in multiple areas — as well as fear-mongering websites.

If an attorney or small firm practices in “Offshore Disclosure,” “Business,” “Trusts and Estates,” “Tax Resolution,” and other areas of practice, then they do not specialize in Voluntary Disclosure – and they are not your best choice for the submission.

.We have several free resources available on our site, which you can find on our FAQ page.

You should read as many of these articles as you can, so you can get a solid understanding of How Voluntary Disclosure works, and the submission process.

2. Check if Your Attorney has Advanced Tax Credentials 

Ideally, the Attorney handling your case will be a State Bar Certified Tax Lawyer. 

International tax law, and especially offshore voluntary disclosure is very complex. There are many components to an offshore disclosure, including the tax aspect, the accounting aspect, the legal aspect, and the potential audit or litigation aspect.

Nearly all the top attorneys in this field who focus exclusively on International Tax, and who handle Voluntary Disclosure regularly, have an advanced Tax Law Degree (LL.M.) and hold either a CPA or EA designation.

If an attorney is an experienced attorney practicing in this field, it is almost a prerequisite to have both an advanced degree such as an LL.M (which is a Master’s of Tax Lawand either a CPA designation or Enrolled Agent (“EA”) designation (an EA is the Highest Credential awarded by the IRS).

What is an IRS Enrolled Agent (EA)?

An Enrolled Agent (EA) is the highest tax credential awarded by the IRS.

*The EA exam is very difficult, which is why the credential is not well-known. It requires a person to pass three (3) different exams (Individual Tax, Business Tax, and Ethics) during three different sessions on three different days, as well as take more than 72 hours of Continuing Education over 3-years.

Many Attorneys have tried taking the EA exam, but failed the exam due to the fact that they just do not have the tax knowledge necessary to pass all three (3) portions.

3. Interview Both the Attorney & CPA/EA if the Attorney is Not a CPA or EA

This is not the time to be bashful. If a small-firm has an in-house CPA, chances are they are tasking the CPA with handling 10 areas of Tax Law, and chances are they will not have the level of proficiency you need. Likewise, if the firm requires you use a certain CPA:

  • Be sure to interview the CPA; and
  • Check if there is any fee splitting between the CPA and Attorney

Voluntary Disclosure is a complex and comprehensive undertaking. Ask the Attorney for specifics, such as:

  • The number of Voluntary Disclosure cases they have handled on their own (excluding Streamlined Cases);
  • Whether or not they have ever handled an OVDP Opt-Out; and
  • Multiple examples of penalty reductions, PFIC Elections, and other penalty reduction strategies they have used in the past.

Ask them the hard questions during the interview, and if they stumble or falter during their explanations, move onto the next Attorney.

4. Litigation/Trial Experience is Important

Usually, you do not know the exact penalty amount when you begin the process. If you want to try to reduce the penalty later, you need an attorney who has litigated and handled trials. Former IRS Agents, Examiners, etc. typically do not have this experience.

Then…Watch Out For Voluntary Scams

Once you have vetted out the case, beware of these common Voluntary Disclosure Scams:

1. The Attorney Fees are Artificially Deflated

In order to properly complete a voluntary disclosure submission, it takes time. — and time, cost money.

Yes, you can go to a general practitioner or junior attorney (less than ~20 years of attorney experience) and pay a significantly reduced fee, or a very senior attorney with no real interest in your case —  but you typically get what you pay for.

This usually leads to the work being sloppy and poor quality — due to the fact that the Attorney and the staff are trying to work on 10-different types of areas of tax (and even non-tax matters), without having a speciality in IRS Offshore Disclosure.

In these types of situations, the client normally comes to us after having paid an artificially low fee to an inexperienced attorney, and realizes the following:

  • The Attorney hired the least expensive CPA they could find to handle the tax returns;
  • The CPA did not seem to understand the tax laws of the particular country; and
  • The Attorney has “no idea” about how the tax returns were prepared.

2. The Attorney Used to Work for the IRS

This is another one of those sales pitches to be very cautious of. 

Working in the Offshore Disclosure Department as a Senior Attorney may be valuable experience. Anything less is just smoke and mirrors being used to divert you from the fact that the Attorney lacks Voluntary Disclosure Attorney experience.

You need an Attorney experienced in Voluntary Disclosure.

3. The Attorney Has No Litigation Experience Representing Their Own Clients

While we are not fans of litigating unless necessary, our Attorneys have litigated highly complex cases. Mr. Golding has represented thousands of clients in many complex cases throughout his nearly 20-year law career. He has successfully avoided criminal prosecution for clients in Tax, Business and Corporate matters.

Mr. Golding has represented clients facing prosecution, and on many occasions facilitated all charges being dropped. We have also handled many complex Audits, including Eggshell audits and Reverse Eggshell Audits, without a single client being referred to prosecution.

This experience helps up to best represent our clients. Without experience litigating on behalf of their own clients in court, many newer attorneys or attorneys without any litigation experience are lost (along with you) when the IRS decides to push back.

4. Are They Selling You on Streamlined, When You Were Willful?

The IRS is clearIf you were willful at all, then you cannot qualify for the IRS Streamlined Program. There are no exceptions for people who were only willful for a year or two, and no exceptions for people who only failed to report “small” amounts of income. We find it reprehensible that there are other attorneys intentionally putting potential clients in serious financial risk, as well as harm’s way for a potential IRS Criminal Investigation, by pushing them into Streamlined when they know the client was willful.

Once you submit to the Streamlined Program, you can not thereafter submit to Voluntary Disclosure

If a person is willful, they do not qualify for Streamlined or Reasonable Cause. It doesn’t matter whether it was 1-year, 5-years or 10-years worth of non-compliance.

**While the extent of the willfulness penalties might be mitigated, you should never submit a reasonable cause letter or streamlined submission if you were willful. This is especially true, since the IRS has begun auditing Streamlined Submissions.

It is not their money or their freedom on the line – it is yours, so be careful…

We Specialize in Safely Disclosing Foreign Money

We have successfully handled a diverse range of IRS Voluntary Disclosure and International Tax Investigation/Examination cases involving FBAR, FATCA, and high-stakes matters for clients around the globe (In over 65 countries!)

Whether it is a simple or complex case, safely getting clients into compliance is our passion, and we take it very seriously.

Examples of areas of tax we handle

IRS Penalty List

The following is a list of potential IRS penalties for unreported and undisclosed foreign accounts and assets:

Failure to File

If you do not file by the deadline, you might face a failure-to-file penalty. If you do not pay by the due date, you could face a failure-to-pay penalty. The failure-to-file penalty is generally more than the failure-to-pay penalty.

The penalty for filing late is usually 5 percent of the unpaid taxes for each month or part of a month that a return is late. This penalty will not exceed 25 percent of your unpaid taxes. If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.

Failure to Pay

f you do not pay your taxes by the due date, you will generally have to pay a failure-to-pay penalty of ½ of 1 percent of your unpaid taxes for each month or part of a month after the due date that the taxes are not paid. This penalty can be as much as 25 percent of your unpaid taxes. If both the failure-to-file penalty and the failure-to-pay penalty apply in any month, the 5 percent failure-to-file penalty is reduced by the failure-to-pay penalty.

However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax. You will not have to pay a failure-to-file or failure-to-pay penalty if you can show that you failed to file or pay on time because of reasonable cause and not because of willful neglect.

Civil Tax Fraud

If any part of any underpayment of tax required to be shown on a return is due to fraud, there shall be added to the tax an amount equal to 75 percent of the portion of the underpayment which is attributable to fraud.

A Penalty for failing to file FBARs

The civil penalty for willfully failing to file an FBAR can be as high as the greater of $100,000 or 50 percent of the total balance of the foreign financial account per violation. See 31 U.S.C. § 5321(a)(5). Non-willful violations that the IRS determines were not due to reasonable cause are subject to a $10,000 penalty per violation.

A Penalty for failing to file Form 8938

The penalty for failing to file each one of these information returns is $10,000, with an additional $10,000 added for each month the failure continues beginning 90 days after the taxpayer is notified of the delinquency, up to a maximum of $50,000 per return.

A Penalty for failing to file Form 3520

The penalty for failing to file each one of these information returns, or for filing an incomplete return, is the greater of $10,000 or 35 percent of the gross reportable amount, except for returns reporting gifts, where the penalty is five percent of the gift per month, up to a maximum penalty of 25 percent of the gift.

A Penalty for failing to file Form 3520-A

The penalty for failing to file each one of these information returns or for filing an incomplete return, is the greater of $10,000 or 5 percent of the gross value of trust assets determined to be owned by the United States person.

A Penalty for failing to file Form 5471

The penalty for failing to file each one of these information returns is $10,000, with an additional $10,000 added for each month the failure continues beginning 90 days after the taxpayer is notified of the delinquency, up to a maximum of $50,000 per return.

A Penalty for failing to file Form 5472

The penalty for failing to file each one of these information returns, or to keep certain records regarding reportable transactions, is $10,000, with an additional $10,000 added for each month the failure continues beginning 90 days after the taxpayer is notified of the delinquency.

A Penalty for failing to file Form 926

The penalty for failing to file each one of these information returns is ten percent of the value of the property transferred, up to a maximum of $100,000 per return, with no limit if the failure to report the transfer was intentional.

A Penalty for failing to file Form 8865

Penalties include $10,000 for failure to file each return, with an additional $10,000 added for each month the failure continues beginning 90 days after the taxpayer is notified of the delinquency, up to a maximum of $50,000 per return, and ten percent of the value of any transferred property that is not reported, subject to a $100,000 limit.

Fraud penalties imposed under IRC §§ 6651(f) or 6663

Where an underpayment of tax, or a failure to file a tax return, is due to fraud, the taxpayer is liable for penalties that, although calculated differently, essentially amount to 75 percent of the unpaid tax.

A Penalty for failing to file a tax return imposed under IRC § 6651(a)(1)

Generally, taxpayers are required to file income tax returns. If a taxpayer fails to do so, a penalty of 5 percent of the balance due, plus an additional 5 percent for each month or fraction thereof during which the failure continues may be imposed. The penalty shall not exceed 25 percent.

A Penalty for failing to pay the amount of tax shown on the return under IRC § 6651(a)(2)

If a taxpayer fails to pay the amount of tax shown on the return, he or she may be liable for a penalty of .5 percent of the amount of tax shown on the return, plus an additional .5 percent for each additional month or fraction thereof that the amount remains unpaid, not exceeding 25 percent.

An Accuracy-Related Penalty on underpayments imposed under IRC § 6662

Depending upon which component of the accuracy-related penalty is applicable, a taxpayer may be liable for a 20 percent or 40 percent penalty

Possible Criminal Charges related to tax matters include tax evasion (IRC § 7201)

Filing a false return (IRC § 7206(1)) and failure to file an income tax return (IRC § 7203). Willfully failing to file an FBAR and willfully filing a false FBAR are both violations that are subject to criminal penalties under 31 U.S.C. § 5322.  Additional possible criminal charges include conspiracy to defraud the government with respect to claims (18 U.S.C. § 286) and conspiracy to commit offense or to defraud the United States (18 U.S.C. § 371).

A person convicted of tax evasion

Filing a false return subjects a person to a prison term of up to three years and a fine of up to $250,000. A person who fails to file a tax return is subject to a prison term of up to one year and a fine of up to $100,000. Failing to file an FBAR subjects a person to a prison term of up to ten years and criminal penalties of up to $500,000.  A person convicted of conspiracy to defraud the government with respect to claims is subject to a prison term of up to not more than 10 years or a fine of up to $250,000.  A person convicted of conspiracy to commit offense or to defraud the United States is subject to a prison term of not more than five years and a fine of up to $250,000.

What Should You Do?

Everyone makes mistakes. If at some point that you should have been reporting your foreign income, accounts, assets or investments the prudent and least costly (but most effective) method for getting compliance is through one of the approved IRS offshore voluntary disclosure program.

Be Careful of the IRS

With the introduction and enforcement of FATCA for both Civil and Criminal Penalties, renewed interest in the IRS issuing FBAR Penalties, crackdown on Cryptocurrency (and IRS joining J5), the termination of OVDP, and recent foreign bank settlements with the IRS…there are not many places left to hide.

4 Types of IRS Voluntary Disclosure Programs

There are typically four types of IRS Voluntary Disclosure programs, and they include:

Contact Us Today; Let us Help You.