We handle a lot of inquiries from taxpayers trying to figure out if they really need to enter into the 2012 Offshore Voluntary Disclosure Program. Oftentimes, we are told that a CPA has recommended to our client that they merely amend past returns and file FBAR‘s going forward. This is know as soft or quiet disclosure. This article will give just one reason why this could be the worst advice ever.
Is Soft Disclosure your answer to IRS Offshore Voluntary Disclosure?
February 16, 2012 | Civil Enforcement, FBAR Penalties, OVDI Offshore Voluntary Disclosure Initiative, Voluntary DisclosureOffshore Voluntary Disclosure Program lands Swiss private banker
February 3, 2012 | FBAR Penalties, OVDI Offshore Voluntary Disclosure Initiative, Voluntary DisclosureJust down the street from our Norwalk, Conn. office, the Wall Street Journal reports that the IRS has just seized $16 million from private Swiss Banker Wegelin & Co. out of a bank account they held at UBS AG in Stamford, Conn.
Can a Real Estate Tax Attorney help?
February 1, 2012 | Federal Tax Liens, Tax AttorneyWhen it comes to the purchase or sale of real estate, a myriad of tax problems can arise that require the help of a real estate tax attorney. This article explains the most common issues and explains what can be done about them.
Voluntary Disclosure Program
January 31, 2012 | FBAR Penalties, OVDI Offshore Voluntary Disclosure Initiative, Voluntary DisclosureThe new IRS 2012 Offshore Voluntary Disclosure Initiative has been announced. So what to do? would you believe there are only four options?
OVDI: The bigger insult to Indian-Americans
January 27, 2012 | FBAR Penalties, OVDI Offshore Voluntary Disclosure Initiative, Voluntary DisclosureVice President Joe Biden, the Don-Rickles-without-the-charm, the best Delawarean to ever inhabit the southeast corner of 34th St. and Massachusetts Ave., is at it again, with another regrettable Indian impersonation:
Voluntary Disclosure 2012: The four options you need to know
January 23, 2012 | FBAR Penalties, OVDI Offshore Voluntary Disclosure Initiative, Voluntary DisclosureIf you are an American taxpayer with an offshore foreign bank accounts that you thought were secret, of you want to rest easy under the new program, Voluntary Disclosure 2012, you must bring all your accounts into compliance – that is file missing FBARs and include any missing income on amended tax returns. But what if you don’t? This article explains the three other options.
Option One: Stick your head in the sand and hope that the IRS never catches you. Perhaps your foreign bank account is at a bank that you think to be “off the radar” or is in a quiet jurisdiction, or under a friend’s name, or opened with a non-US passport. Well, it used to be that a foreign bank account’s true owner could be kept fairly secret. However, now, the Internal Revenue Service has vastly many more weapon at its disposal than it ever did previously to find unreported accounts.
Here’s the thing - every global banking and financial organization must be in the US marketplace or it would become such a small time player that the foreign bank’s shareholders would revolt. Despite everything you may have heard, the American is still by far the largest economy in the world and every global foreign bank must be on the good side of the Internal Revenue Service – otherwise that foreign bank will be shut out of getting US capital or customers! Part of being on the good side of the IRS is to cough up what the IRS says to cough up. So the foreign bank is really at the mercy of the Internal Revenue Service….meaning so are the banks’ foreign account holders. So you see, hiding becomes riskier and riskier. And once the IRS starts seeking a criminal indictment, there are no option left except…pay outrageous taxes and the highest penalties and face the significant possibility of real jail time.
Option 2: Renounce citizenship; Leave the country. There is only way to escape the jurisdiction of the Internal Revenue Service taxing authority. That is, to renounce one’s citizenship and no longer be a US citizen. The process is complicated. Furthermore, a requirement of proper expatriation is that a citizen has to be in compliance with all tax laws and pay an expatriation tax in order to make it official. If the expatriation is handled improperly, the IRS treats it as a non-event, meaning you are still subject to the jurisdiction of the Internal Revenue Service — indefinitely . Renouncing your citizenship only gets rid of future tax liabilities, but you have to inform the IRS about the existence of undisclosed financial accounts first.
Option 3: Soft (or quiet) disclosure. An option that some taxpayers tried is to file amended tax forms 1040X’s and mail them to the IRS just think “regular” 1040X’s, pay the taxes, and hope the IRS won’t figure out what was going on. Sounds like a good strategy, right? Perhaps one could avoid all those excessive penalties of the OVDI programs?
The Internal revenue service says that these amended returns are “red flags.” Even though the tax returns are amended and back taxes paid, the Internal revenue service tells says that account holders will still face penalties and criminal charges. In addition to charging and prosecuting people with undeclared foreign income, the Department of Justice claims that it has also begun prosecution of taxpayers whose “Quiet Disclosures” were discovered by the Internal revenue service.
The “soft” disclosure option is incredibly risky for several reasons. One reason is that a soft disclosure does not address the matter of the taxpayer’s non-compliance in FBAR filing; failing to filing an FBAR can be a criminal charge just by itself. So simply filing a quiet disclosure does not go far enough to eliminate any likelihood of criminal investigations. In fact, the 1040X might — well here’s the problem with this alternative — it does nothing about the failure to the FBAR. There are still criminal and civil investigations that may be pending for failing to file an FBAR, but simply give the Internal revenue service a very handy to find you.
As you can see, taxpayers in non-compliance are between a rock and a hard place. It is either come clean using Voluntary Disclosure 2012 or attempt a Presidential pardon.
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Find out more information on Offshore Voluntary Disclosure Initiatives by visiting our main OVDI page or by reading articles from our OVDI blog category.
Looking for a little lighter fare? Check out the Strangest State Tax Write-Offs.
Free Tax Reports available at our home page. Request yours today.
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Don’t learn taxes the hard way: Hire an Income Tax Attorney
January 22, 2012 | Tax AttorneyAn experienced Income Tax Attorney has one objective in their sights. To resolve your tax matters for ever and ever. At IRSmedic, you’ll be represented by an Income Tax Attorney that has years of fixing the most difficult tax problems across the United States.
Your IRSmedic Income Tax Attorney handles everything from unfiled tax returns, levies, liens, tax examinations, tax penalties, and all other Internal Revenue Service or State tax enforcement procedures. Your Income Tax Attorney is admitted to U.S. Tax Court which enable them to advocate for us taxpayers all across the United States and all over globe. Your knowledgeable Income Tax Attorney has just one objective at heart: to remove your tax difficulties with the best possible result for you. A Income Tax Attorney can handle any particular collection battle of the Internal Revenue Service in addition to State Tax revenue agencies. For instance, tax debt negotiations tax audits, foreign bank account initiatives, tax garnishments, liens, tax penalties, and unfiled forms. You need the very best possible outcome. Only your Income Tax Attorney has the familiarity, skill and special legal training to get you the very best outcome.
Income Tax Attorney must specialize on Income taxes!
Be careful of some lawyers who practice additional areas of legal practice besides tax law. The fact is the tax code is so complicated, some one must concentrate on it completely so as to be effective. And make sure not to pay for an hourly fee. If you do, that law firm wants someone to pay them for their time so he or she learn the tax code. An experienced Income Tax Attorney should nearly always be able to give you a flat fee quote.
Did you realize that the IRS actually allows non-attorneys to represent you before them? Do you ever speculate why this is? Well think about it, if you were a district attorney, wouldn’t you rather have a Defendent you need the jury to judge guilty be represented by someone other than an experienced criminal attorney? Not surprisingly you would your opposition to be represented by the least competent person. You would like every advantage allowable. You would love it if the Defendant hired instead a ‘criminal resolution specialist,’ instead of Matlock, wouldn’t you? So by giving you a false choice of who can represent you, the Internal Revenue Service isn’t doing you any special favors, is in reality, stacking the jury in their favor. And worse, the internet is littered with non-lawyer companies who claim that they are just as good as lawyers. So does the Internal Revenue Service stop them? No. Why would we expect them to?
Here’s the facts. When you seek the advice of anyone except a attorney or someone who works at that attorney’s firm about your confidential tax problem, the Department of Justice can subpoena that person and force them to give evidence against your direct interests. That is not a danger worth risking. Innocent people are convicted of crimes every day. That is a fact. Don’t fall for the trap thinking that you could afford second- or third-. Your property and freedom is simply too valuable. If you have a tax trouble, you absolutely need a Income Tax Attorney .
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Looking for a little lighter fare? Check out the Strangest State Tax Write-Offs.
Free Tax Reports available at our home page. Request yours today.
Stay connected. Follow us on twitter or like us on facebook.
IRS Lawyer for IRS Problems
January 22, 2012 | Tax AttorneyDid you know that 3-6% of all American tax filers will have a some sort of tax problem in 2012? With so much need for tax assistance, it is hard to know who the best kind of professional can help you. Confusing matters more is that there re three types of professionals that can represent you before the IRS. Read this article or watch this video to help figure out your best move.
Why to hire a Tax Problem Attorney
January 20, 2012 | Tax AttorneyA Tax Problem Attorney has to be talented in order to resolve one’s tax matters for the best possible result. That doesn’t just mean the lowest amount handed back; a Tax Problem Attorney should also have the capacity to fix what created the situation in the first place. Only an experienced Tax Problem Attorney can understand how the IRS, in addition to State revenue board, seek to extract money from taxpayers. Additionally, a Tax Problem Attorney must appreciate the intense pressures taxpayers are under.
FBAR FAQ
January 19, 2012 | FBAR Penalties, OVDI Offshore Voluntary Disclosure Initiative, Voluntary DisclosureWe blogged about FBAR filing requirements in the past: what purpose they serve, and why the IRS is in charge of them. When a taxpayer violates the FBAR filing requirements, here’s how it works its way through the labyrinth of the Internal Revenue Service.
Anthony Parent is the founder of IRS Medic at Parent & Parent, a practice of tax attorneys that works to resolve tough tax problems for businesses and individuals in the US and overseas.
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