Plan to Avoid Criminal Prosecution of Hidden Overseas Income

Avoid Criminal Prosecution of Hidden Overseas Income & Assets

Each year, our international tax law specialist team works with hundreds of Taxpayers from across the globe to carefully evaluate and assess their different options for unreported offshore income, assets, accounts, and investments. While most US Taxpayers are not in any jeopardy of violating a criminal statute and thus becoming subject to criminal prosecution, it does happen. There are some ways to avoid criminal prosecution of undisclosed offshore income and accounts –– and it typically involves submission to the IRS Voluntary Disclosure Program. Let’s review five (5) important tips about how taxpayers may avoid or minimize the chance of being prosecuted criminally for undisclosed offshore income, assets, investments, and accounts.

Try to Avoid Online Fear-Mongering

Less experienced offshore attorneys and self-proclaimed tax experts (despite having many years of legal/tax experience) tend to unnecessarily fear-monger taxpayers into believing that they are only seconds away from being arrested — and that unless they immediately retain that attorney, without the ability to speak with other counsel first –– their world will come crashing down. More often than not, a tax violation is civil in nature. Therefore, before retaining an attorney or making a proactive representation to the Internal Revenue Service or Department of Justice involving undisclosed offshore income and assets, the taxpayer should try their best to remain levelheaded and not feed into unfound fears – more often than not, it is nowhere near as bad as a taxpayer may envision after reading online fear-mongering articles.

Assess Your Specific Facts 

Just because a Taxpayer reads a website that describes factual situations involving potential willfulness — and the facts in the article may be somewhat similar to that particular set of facts of the Taxpayer reading the article — that does not mean the reader is willful or violated any criminal statute. Oftentimes, Taxpayers will have different facts that they may not have considered at the time they are assessing their own violation in relation to somebody else’s situation. Therefore, when evaluating whether a violation is willful or criminal, it is important for taxpayers to focus on their own set of facts and not someone else’s — even if some of the other persons’ facts may have similarities to their own situation.

Speak with Experienced Board-Certified, Dual-Status Attorneys

In order to make sure Taxpayers are speaking with an attorney who best understands their situation, they should make the Attorney is a  Board-Certified Tax Law Specialist who has at least 2-years of attorney experience — and is dual-licensed. They should also specialize exclusively in international tax and offshore disclosure matters — because working with a general tax practitioner in this very specialized area of tax can have unforeseen consequences. Taxpayers should be sure to speak with multiple lawyers to get a good lay of the land.

Avoid the “Quiet Disclosure” Temptation

Once some taxpayers learn they are out of compliance and could possibly be facing stiff penalties and even criminal investigation, their knee-jerk reaction is to file something immediately with the IRS and get into compliance. The problem is if a Taxpayer just files late returns or international reporting forms without following the proper protocol, this could be considered a quiet disclosure could lead to even worst fines and penalties than the Taxpayer would have been subject to — had they submitted through one of the offshore amnesty programs.

Consider the IRS Voluntary Disclosure Program

For taxpayers who are willful and are concerned about criminal violations and prosecution, the only option available is typically the RS Voluntary Disclosure Practice a.k.a. VDP.  The program shifted since 2018 and OVDP — but it is still a great program for Taxpayers who are willful and/or are worried about criminal prosecution.

About Our International Tax Law Firm

Golding & Golding specializes exclusively in international tax, and specifically IRS offshore disclosure. 

Contact our firm for assistance with getting compliant.