From the Tax Legislation Workplaces of David W. Klasing

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.

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Public Contact:
Dave Klasing Esq.
M.S.-Tax CPA
(email protected)

SOURCE Tax Law Offices of David W. Klasing, PC