From the Tax Law Offices of David W. Klasing - The IRS is Criminally Prosecuting Taxpayers Whose Behavior was Willful and Made a Streamlined Voluntary Disclosure

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Tax Law Offices of David W. Klasing, PC

Mar 09, 2021, 06:37 ET

IRVINE, Calif., March 9, 2021 /PRNewswire/ -- Some taxpayers are still figuring out their reporting obligations when it comes to foreign bank account reporting (FBAR) and taxable offshore income, which is the reason that the Internal Revenue Service distinguishes between willful and non-willful violations. However, a recent case has indicated that the IRS is ready to pursue criminal prosecution against those who feign that their FBAR violations were non-willful when in fact their behavior was willful. The dually licensed California Tax Attorneys and CPAs from the Tax Law Offices of David W. Klasing have extensive experience in assisting our clients in navigating through possible FBAR filing mistakes that could lead to criminal prosecution and the differing programs that can be used to safely come back into compliance. We want to inform you about how the IRS is criminally prosecuting taxpayers that demonstrate criminal tax and foreign information reporting behavior, indicating to the IRS that their streamlined voluntary disclosures are falsely certified as non-willful.

The indictment in a recent case asserted the defendant held an interest and authority over at least 20 foreign financial accounts in multiple countries and is accused of utilizing the IRS Streamlined Domestic Offshore Procedures to make a false submission further concealing instead of fully disclosing all reportable offshore income related to his previously undisclosed foreign financial accounts.

These allegations are a rare moment where the IRS has shown that it will prosecute taxpayers that use the streamlined voluntary disclosure program to defraud the administration. Due to this, a taxpayer may end up being the target of a criminal tax and foreign information reporting investigation rather than receiving a break on mandatory non-willful FBAR violation penalties and other favorable program terms.

The streamlined disclosure program is solely for taxpayers that have not committed offshore FBAR and unreported foreign income violations willfully. To show that an FBAR offense was not willful, the taxpayer will need to present written evidence that the violation occurred because of negligence, mistake, or another good faith reason.

Call our firm at (800) 681-1295 or use our website to schedule a consultation.

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Public Contact:
Dave Klasing Esq.
M.S.-Tax CPA
[email protected]

SOURCE Tax Law Offices of David W. Klasing, PC