Are You a First-Timer? Start Here. (Krantz Attorneys)
Chances are that if you found this page, you may be in a situation in which you did not properly report or disclose income, assets, accounts, and/or investments to the IRS.
If so, you came to the right place — we can help!
Here is a brief analysis to determine if you require IRS Voluntary Disclosure:
Do You Have Unreported Foreign (or Domestic) Income?
If you have unreported foreign/domestic income and assets/accounts for prior years, then your prior year tax returns are inaccurate. You will need to get into compliance through an approved IRS program and you cannot just quietly disclose (aka just start reporting the income/assets from this year forward).
Do You Have Foreign Accounts You Never Reported?
If you have unreported foreign accounts, you must assess the value of the accounts, the amount of unreported income, and whether foreign taxes have been withheld. Accounts includes bank accounts, investment accounts, pension accounts, mutual funds, insurance policies, etc. If there is no unreported foreign income, you may qualify for one of the delinquency procedures and avoid penalties. Otherwise, you may have to submit to one of the approved IRS programs.
Do You Have Foreign Assets You Never Reported?
If you have unreported foreign assets, you also must assess the value of the assets, the amount of unreported income, and whether foreign taxes have been withheld. Assets includes foreign accounts, investments, corporations, joint ventures, trusts, etc. If there is no unreported foreign income, you may qualify for one of the delinquency procedures and avoid penalties. Otherwise, you may have to submit to one of the approved IRS programs.
Did You Use an EA, CPA or Tax Preparer?
If you had a tax professional you worked with, it will impact whether you are considered willful or non-willful. In addition, it is important to assess if the preparer provided you a Tax Organizer/Binder or other written communications. There is no attorney client privilege with a CPA, EA, or Tax Preparer.
Has the IRS Contacted You?
If the IRS has not contacted you, you may still apply for amnesty/voluntary disclosure. There are certain deadlines you must be aware of. And, it is important to note the IRS can terminate these programs (or increase the penalty) at any time. Unfortunately, time is of the essence, due to increased enforcement by the IRS.
What Should You Do?
So, you made a mistake. Everyone makes mistakes. The prudent and least costly (but most effective) method for getting into compliance is through one of the approved IRS offshore voluntary disclosure programs.
4 Types of IRS Voluntary Disclosure Programs
There are typically four types of IRS Voluntary Disclosure programs, and they include:
- Traditional (IRM) IRS Voluntary Disclosure Program
- Streamlined Domestic Offshore Procedures (SDOP)
- Streamlined Foreign Offshore Procedures (SFOP)
- Reasonable Cause (RC)
Contact us today; let us help you.
Ezra holds a Master's in Tax Law from one of the top Tax LL.M. programs in the country at the University of Denver. He has also earned the prestigious IRS Enrolled Agent credential. Mr. Krantz's articles have been referenced in such publications as the Washington Post, Forbes, Nolo, and various Law Journals nationwide.
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