- 1 Should I Rush into Disclosing Unreported Overseas Accounts?
- 2 Act Immediately on Prior FBAR and Form 8938
- 3 Do Not Speak with Other Attorneys
- 4 Sign a 2848 Power of Attorney on the Spot
- 5 Huge Fines and Prison for FBAR/FATCA Noncompliance?
- 6 Sign an Hourly Fee and Retain Both an Attorney & Outside CPA
- 7 Be Safe and Keep Your Wits You
- 8 International Tax Lawyer Specialist Team
Should I Rush into Disclosing Unreported Overseas Accounts?
Of course not.
When US Taxpayers are out of offshore compliance for not timely reporting prior year Foreign Bank and Financial Accounts on a myriad of different international information reporting forms such as the FBAR, Form 8938, Form 8621, etc. — they are understandably nervous. There is an immense amount of online fear mongering and scaremongering, which makes individuals feel as if they are going to go to prison or get hit with six and seven figure penalties simply because they did not report their offshore accounts — but it is never as bad it seems.
In fact, most taxpayers can safely get into compliance by filing through one of the offshore amnesty programs.
Oftentimes, a taxpayer will reach out to our firm after speaking with one of these scaremongering firms and let us know they were provided the following advice:
- Act immediately
- Do Not speak with any other Attorneys
- Hurry Up and sign a Form 2848 on the spot
- Act Now to Avoid Huge Fines in Prison
- Sign a Kovel and pay for both an Attorney and CPA
Let’s take a look at these five factors in order —
Act Immediately on Prior FBAR and Form 8938
Have you ever looked back at any point in your life and thought to yourself —
- “I really should have acted more hastily and without taking sufficient time to process the information before I made that decision –“
When taxpayers contact us and tell us they’ve been told that they need to act that same day — it sounds like either a:
- Ponzi scheme;
- Used Car Salesman Pitch; or
- A Gym membership presentation
You should never act “immediately,” and before you get a chance to process the information — which brings us to point two (2).
Do Not Speak with Other Attorneys
The only two types of attorneys that will tell you not to speak with other attorneys before signing with them are:
- Inexperienced Counsel; and
- Overly Aggressive Counsel.
We’ve seen this issue on both sides of the coin. More often than not, it is an aggressive attorney who has convinced you that you are going to go to prison for not filing these forms and that you need to act immediately.
Before signing with a law firm, it always benefits you to at least speak with a few different Board-Certified Tax Specialist Attorneys to get different perspectives on how to properly get into compliance with the IRS.
If you’re speaking with an attorney that begins to sound like a jealous boyfriend or girlfriend trying to keep you all for themselves and wanting to prevent you from speaking with other attorneys before making a decision — it’s a bad sign.
Sign a 2848 Power of Attorney on the Spot
When you sign a Form 2848 on the spot, you are literally giving someone power of attorney to communicate with the IRS on your behalf. It is never advisable to give someone a Form 2848 Power of Attorney until you are ready to hire them.
The reason these Attorneys want you to sign ASAP is so you feel compelled into representation — even when you are not sure about it.
Huge Fines and Prison for FBAR/FATCA Noncompliance?
It is important to get into compliance and to do so before the IRS finds you, but the reason the IRS created these offshore amnesty programs is because they want to provide you the opportunity to get into compliance. The IRS is not as bad as some tax practitioners make it seem — and tens of thousands of taxpayers safely get into compliance each year without the U.S. Government banging down their door.
Sign an Hourly Fee and Retain Both an Attorney & Outside CPA
When an attorney is too inexperienced in Offshore cases, they will utilize hourly fees to puff up the bill and charge you for services that should be bundled into a flat-fee model. They charge a low up-front retainer to entice you, but ultimately, you end up paying more in the long-run as the attorney keeps burning through and replenishing the retainer.
When it comes to Streamlined Cases, Tax Specialists will always utilize a flat-fee, full-service model.
For example: You are preparing to speak with your attorney who is charging you hourly.
Here is how the hourly attorneys charge you:
- Review the case (charge)
- Prepare for the call (charge)
- Speak with you (charge)
- “Discuss” with their staff, if they have any staff (charge)
- Write up a file summary (charge)
- Send you an email summary (charge)
- They think about the matter again on the drive home (charge)
- And they prepare an updated summary (charge)
- Review new correspondence from the IRS (charge)
- Prepare & “analyze” correspondence before calling the IRS (charge)
- Waiting on hold for an hour with the IRS (charge)
- Email you to say they couldn’t get through (charge)
- Call the IRS again the next day, on hold for another hour (charge)
- Email you to say the call was unsuccessful (charge)
- Now, you are concerned so you call them to discuss. Leave a voicemail because you can’t get through, and you also email a follow-up.
- Listen to your voicemail and read your email (charge)
- Re-review your file to prepare before calling you (charge)
- And the cycle repeats (charge, replenish retainer, repeat)
Then, after paying this inexperienced attorney thousands of dollars, you start losing confidence and realize you need to hire someone else and start all over again. It is better (for your peace of mind and also your wallet) to just go to an experienced lawyer right from the start, to take care of the matter for you.
Our Streamlined Filing Offshore Lawyers have developed a highly-effective representation fee model that is used by other experienced law firms across the globe.
*Here is a real-life example of how the bait-and-switch works.
Be Safe and Keep Your Wits You
In conclusion, if you have unreported foreign accounts, assets, investments, and/or income, it can be an overwhelming and scary situation – but usually it is nowhere near as bad as some tax practitioners and attorneys want you to believe.
Keep your wits about you and keep a cool head – and you’ll be fine.
International Tax Lawyer Specialist Team
Contact our firm for assistance.