Updated Voluntary Disclosure Program FAQ Questions & Answers (2019) - Golding & Golding

Updated Voluntary Disclosure Program FAQ Questions & Answers (2019) – Golding & Golding

Updated Voluntary Disclosure Program FAQ Questions & Answers (2019)

The following is a list of Frequently Asked Questions we receive on issues involving IRS Voluntary Disclosure:

Is Voluntary Disclosure to the IRS, Safe?

This is probably one of the most common (and important) questions we receive from clients on a daily basis. The simple answer is yes, it is very safe…as long as you use competent and experienced counsel, and the submission is done properly.

How Do I Know if I will Be Accepted?

While there are no guarantees that you will be accepted, the IRS recently updated its procedures, and this includes a Preclearance Letter format as it was used under traditional OVDP.

Generally Preclearance (at least under OVDP) took 30-45 days. Under the revised procedures, preclearance will be submitted on a form provided by the IRS.

What Type of Attorney Should I Hire?

IRS Voluntary Disclosure is a specialized area of law. An IRS Voluntary Disclosure is a complex undertaking. It requires the coordination of several moving parts, including strategy development, Tax Preparation, Legal Analysis, Negotiation and more.

You should hire a Tax Attorney who has the following credentials:

  • ~20 Years of Private Practice experience representing his/her own clients
  • Experienced in Criminal and Civil Tax Litigation
  • Experienced representing clients in Eggshell and Reverse Eggshell Audits.
  • Advanced Tax Degree (LL.M.)
  • EA (Enrolled Agent) or CPA (Certified Public Accountant)
  • Preferably a Board Certified Tax Law Specialist

Can I Just Use a CPA?

While technically, you can use a CPA — we do not advise that you do so and it is not because we are Attorneys. It is because there is no attorney-client privilege with a CPA. And, because there is an element of willfulness with Voluntary Disclosure, it is important to use an Attorney in order to maintain the confidentiality privilege.

My Attorney Uses a CPA with a Kovel Letter, Am I Protected?

Despite what people would like to think, a Kovel Letter is not a magic wand. It does not bestow the Attorney-Client privilege to non-Attorney Accountants, CPAs, etc. except in limited situations in which the Attorney requires an Accountant in order to provide legal advice to a client.

If your Attorney is referring you to a CPA under a Kovel Letter, please be sure to have the Attorney explain the procedures and protections to you. If the CPA is “in-house” be sure they are an Employee and not an “Independent Contractor” of the firm. Otherwise, the information you provide may not be privileged.

What is a Preclearance Letter?

A Preclearance Letter allows an applicant to first submit a “request: to the IRS for submission into the voluntary disclosure program — before submitting all of his/her information to the IRS.

*If a person is rejected, they still have methods for getting into compliance.

Am I Guaranteed Amnesty from Prosecution?

While a person is not “guaranteed” amnesty from prosecution, it is the IRS’ pattern and practice to reject criminal prosecution of individuals or other applicants who make a “full” and “truthful” disclosure.

How Many Years of Taxes/FBARs Do I Need to Submit?

Under the revised rules, a person submits 6 years of amended/original tax returns. This includes informational returns such as 3520, 3520-A, 5471, 5472, 8865 and 8938 (amongst others).

*You may be able to submit additional years under specific circumstances, such as to establish basis or other reasons.

How Much is the Voluntary Disclosure Penalty?

Under the revised procedures, there is not exact penalty equation as there was under OVDP, but the IRS refers to certain IRM (Internal Revenue Manual) enforcement procedures for review. Typically, this would mean a 50% FBAR penalty (or $100,000 per year), whichever is GREATER.

*The IRS has leeway to reduce (or even increase) the penalties. 

What are the Different Penalties?

Currently, there is a 3-4 tier penalty structure:

– Taxes Due: The Penalty is generally going to be a 75% Tax Fraud Penalty against the single year with the most amount of Tax Due.

– FBAR Penalty: The Penalties is generally going to be a 50% penalty on the maximum balance or $100,000 per year penalty – whichever penalty comes out higher

– Information Return Penalty: Varies based on facts and circumstances and may be waived.

– Other Penalties: Varies based on facts and circumstances and may be waived

Is there an Opt-Out Procedure?

Under the revised procedures, it is unclear if there is a specific “Opt-Out” procedure, but there is an appeal process available if you disagree with the penalty. In other words, if you disagree with the penalty, you will have a chance to dispute or appeal it.

What if I am in OVDP, can I Still Opt-Opt?

If you submitted to, and were accepted to OVDP prior to the close date (9.28.18), the IRS will still allow an Opt-Out. 

The IRS has not indicated they will dis- allow an opt-out. Just because OVDP has ended does not mean that the Opt-Out is no longer available or that you lose your right to opt-out.

What if I Disagree with the Penalty?

If you disagree with the penalty, you may have the opportunity to dispute or appeal the penalty, with the understanding that while the penalty may be lowered, it may also be increased.

What if I Submit, But Then Do Not Want to Complete the Submission?

If you begin the submission process, but no longer want to go forward, you have to be careful. That is because some of your information is already “out there.” If you do not submit  a “complete and truthful” submission, it may result in higher fines, penalties or even worse.

How Do I Know if the IRS Already has my Information?

Unfortunately, there is no way to know for sure if the IRS already has your information, but even if they do and you are rejected – you have options for compliance, which are usually better than getting caught being out of compliance.

What if My Current Attorney…Blows?

Unfortunately, 15% of our business comes from Other Attorneys who just don’t get it. They jumped into Voluntary Disclosure/Streamlined Offshore with little to no law firm/private practice experience.

They think after handling a few streamlined case, they are now “Experts.” They usually have less than 10 years of private practice experience, and no litigation or trial experience.

Maybe they worked for the IRS in a non-attorney role, non-Voluntary Disclosure role, or just earned an LL.M — but are just not experienced enough to handle this type of case.

You can always change your attorney, no matter how late in the game you are – and we may be able to assist you.

Feel free to email our Client Relations Manager (Mandy) directly at admin@goldinglaweyers.com to see if we can help.

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).

Get Into Compliance with Experienced Counsel

Offshore Disclosure is complex. It is a specialty area of tax law, which requires a experience firm that specializes exclusively in IRS Offshore Disclosure.

How do you Vet out Potential Attorneys?

Three words: Credentials, Experience, Education.

What is the Board Certified Tax Law Specialist Credential?

Once an Attorney earns the prestigious Board Certified Tax Law Specialist credential, it proves to the general public that the attorney is dedicated to tax law, and has real tax law practice experience as an Attorney.

Few tax attorneys have passed the tax speciality exam (regarded as one of the most difficult tax exams in the country) — and met the additional education, experience, and recommendation requirements necessary for certification.

Once a person becomes “Board Certified in Tax,” it shows they have met the following requirements:

  • Advanced tax education 
  • Extensive tax law experience
  • Attorney & Judge recommendations for certification

In California for example, there are 200,000 active Attorneys, with tens of thousands of Attorneys practicing in some area of tax — and only 350 Tax Attorneys have successfully earned the designation.

Less than 1% of Attorneys nationwide have earned the credential.

Tax Law Specialty Firms are Best Prepared to Represent You in Specialized Tax Matters

Unless the firm has 50-100 attorneys, with a $25 million operating budget, a successful boutique tax-law firm will almost always have all of the attorneys in the firm devote the firms’s time, energy, and resources to one specific area of tax.

In other words, all the attorneys in the boutique tax firm practice the same, single area of tax law.

Some common niche areas of tax law include:

  • Tax Litigation
  • Employment Tax
  • Sales Tax
  • Offshore Voluntary Disclosure

For example, in employment tax, all tax attorneys in the firm handle employment tax related cases. In sales tax, all the tax attorneys in the firm handle sales tax. It may be “Sales Tax” in various different fields and industries — but the firm will limit the niche practice to sales tax.

The same is true for Offshore Voluntary Disclosure. If a firm handles Offshore Voluntary Disclosure, then all tax attorneys at the firm should be handling the same area of tax law.

This area of Offshore Disclosure law is constantly evolving, and becoming infinitely more complicated — including highly complex issues involving:

  • FBAR
  • FATCA
  • PFIC
  • CFC
  • International Cryptocurrency
  • J5
  • Increased Schedule B Enforcement (Paul Manafort)
  • Foreign Gifts
  • Foreign Inheritance
  • Foreign Business 
  • Foreign Trusts
  • OVDP
  • IRM
  • SDOP
  • SFOP

If a small firm has attorneys practicing 5-10 different areas of tax law (and even non-tax law related matters) – it can put your case at a severe disadvantage.

Why? Because it is impossible for these types of “general tax firms” to establish set protocols, policies and procedures sufficient to handle all the complexities and nuances for multiple different types of niche tax law areas.

At our tax specialty firm, we handle matters involving Offshore Voluntary Disclosure, and each case is led by one or more highly experienced attorneys.

This guarantees that your case gets the time and dedication it deserves.

Why Do We Care?

Because each month, like clockwork, we get calls from individuals in an utter state of panic, because the “Expert” or “Specialist” who made themselves out to be knowledgeable, has no real knowledge of Offshore Disclosure.

It turns out, the Attorney has never handled a complex Offshore Disclosure.

Oftentimes, Golding & Golding is called upon to fix these messes. Click Here to learn about some of the representative matters we have handled.

Serious Tax Matters; Serious Tax Consequences

Getting hit with an eggshell audit, reverse-eggshell audit, or IRS Special Investigation involving offshore money is serious business – it’s not like getting a traffic ticket or speeding ticket.

The ramifications of serious tax inquiries by the IRS (especially in the area of Offshore Disclosure and Compliance), can result in serious consequences such as monetary fines, penalties and even jail time.

Sean M. Golding, JD, LL.M., EA (Board Certified Tax Law Specialist)

IRS Offshore Disclosure is ALL we do.

Our Managing Partner, Sean M. Golding, JD, LLM, EA  earned 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, and authorizes him to represent clients nationwide.)

Mr. Golding and his team have successfully handled several hundred IRS Offshore/Voluntary Disclosure Procedure cases. Whether it is a simple or complex case, safely getting clients into compliance is our passion, and we take it very seriously.

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

Golding & Golding – IRS Offshore Disclosure Lawyers

We are the only attorneys worldwide that focuses exclusively in IRS Offshore Disclosure, and each and every case is led and managed by Mr. Golding and his team.

What Type of Attorney Should I Hire?

IRS Voluntary Disclosure is a specialized area of law. An IRS Voluntary Disclosure is a complex undertaking. It requires the coordination of several moving parts, including strategy development, Tax Preparation, Legal Analysis, Negotiation and more.

You should hire a Tax Attorney who has the following credentials:

  • ~20 Years of Private Practice experience representing his/her own clients
  • Experienced in Criminal and Civil Tax Litigation
  • Experienced representing clients in Eggshell and Reverse Eggshell Audits.
  • Advanced Tax Degree (LL.M.)
  • EA (Enrolled Agent) or CPA (Certified Public Accountant)
  • Preferably a Board Certified Tax Law Specialist

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.

Who Decides to Disclose Unreported Money?

What Types of Clients Do we Represent?

We represent Attorneys, CPAs, Doctors, Investors, Engineers, Business Owners, Entrepreneurs, Professors, Athletes, Actors, Entry-Level staff, Students, Former/Current IRS Agents and more.

You are not alone, and you are not the only one to find himself or herself in this situation.

Examples of Areas of Tax we Handle:

Beware of Copycat Law Firms

Unlike other attorneys who call themselves specialists or experts in Voluntary Disclosure but are not “Board Certified,” handle 5-10 different areas of tax law, purchase multiple keyword specific domain names, and even practice outside of tax, we are absolutely dedicated to Offshore Voluntary Disclosure.

*Click here to learn the benefits of retaining a Board Certified Tax Law Specialist with advanced tax credentials.

International Tax Lawyers - Golding & Golding, A PLC

International Tax Lawyers - Golding & Golding, A PLC

Golding & Golding: Our International Tax Lawyers practice exclusively in the area of IRS Offshore & Voluntary Disclosure. We represent clients in 70 different countries. Managing Partner, Sean M. Golding, JD, LL.M., EA and his team have represented thousands of clients in all aspects of IRS offshore disclosure and compliance during his 20-year career as an Attorney. Mr. Golding's articles have been referenced in such publications as the Washington Post, Forbes, Nolo and various Law Journals nationwide.

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.)
International Tax Lawyers - Golding & Golding, A PLC