Chicago Tax Lawyer

Voluntary Disclosure Attorney

Do you have offshore assets/income you haven’t reported accurately to the IRS? A Gordon Law Group voluntary disclosure attorney can help!

You may be able to take advantage of the IRS Voluntary Disclosure Program if you have assets in one or more offshore accounts and:

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Your Gordon Law Group voluntary disclosure attorney can help you understand eligibility requirements and guide you through this confusing process every step of the way.

What Is Voluntary Disclosure?

Generally, taxpayers in the United States have certain tax filing and payment obligations related to assets and income in other countries. Failing to meet these obligations can result in significant civil or even criminal penalties.

Voluntary disclosure processes and other regulations related to taxpayers’ interests in offshore accounts and assets have long been in place with the IRS, offering honest taxpayers a way to potentially avoid prosecution for evading IRS rules related to their offshore accounts, assets, investments, and income.

Prior to 2018, the IRS had separate regulations and processes for offshore and domestic assets. In 2018, the current framework replaced the previous Offshore Voluntary Disclosure Program, essentially combining the offshore and domestic voluntary disclosure rules. Ultimately, this consolidated program is designed to allow taxpayers to improve their chances of avoiding criminal prosecution and facing lower civil penalties when they choose to voluntarily come forward to the IRS to report their offshore assets and accounts.

Voluntary disclosure involves taking action to file information with the IRS Criminal Investigation (CI) department, cooperating with the IRS in determining the amount you owe, and making arrangements to pay your balance due in good faith—including taxes, penalties, and interest.

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When Should You Consider Voluntary Disclosure?

Voluntary disclosure may be an option to consider if you have violated federal tax laws by failing to file your tax returns when due, by failing to file FBAR reports or other required notice filings, or by providing inaccurate information to the IRS. Choosing Voluntary Disclosure may make sense if you willfully violated one or more tax laws, have not yet been contacted by the IRS about the violation(s), and are hoping to avoid criminal prosecution.

Depending on the circumstances of your situation, there may be alternative solutions you should consider. A tax attorney can help you understand your options so you can make an informed decision about how to proceed.

What Potential Tax Penalties Might You Face?

It is important to understand that following the voluntary disclosure rules is not a guarantee that you will avoid criminal or civil penalties. However, doing so may lower the chances that the IRS will recommend prosecution. The program rules, as revised in 2018, provide for the imposition of a 75% penalty for civil fraud against the tax year with the greatest tax liability, if your disclosure relates to multiple tax years. The IRS may also, at its discretion, impose civil fraud penalties against additional tax years.

FBAR penalties may also apply, assessed as the greater of $100,000 or 50% of the maximum value of the offshore account. You will not automatically face a penalty for failure to timely file an informational return, however. The IRS will review each situation on a case-by-case basis, using discretion to determine whether additional penalties are appropriate.

If you qualify for a streamlined offshore voluntary disclosure process, you can expect to pay a one-time 5% penalty or even avoid penalties altogether in some cases.

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Why Hire An OVDP Attorney?

There are certain rules that must be followed when taking advantage of IRS voluntary disclosure procedures, including time limits and specific forms. There are multiple steps involved in the process, including obtaining preclearance and finalizing a voluntary disclosure agreement.

An attorney who understands these rules and requirements can help ensure your pre-clearance form contains all necessary elements—including a narrative description and information about your income and reportable assets/accounts, domestic and offshore. Your attorney may also be able to help you use a streamlined filing process if your situation qualifies.

If you have already requested voluntary disclosure and did not reach an agreement with the IRS or want to appeal the IRS decision, your tax attorney can also help you understand and exercise your right to an administrative appeal if you choose to do so.

David Morgan

Founder Pajax

To learn more about voluntary disclosure and to explore whether it makes sense for you, contact Gordon Law Group today.