The American Bar Association's taxation section recently held their annual meeting. This group of legal professionals from throughout the country met with representatives from the Internal Revenue Service (IRS) to discuss the agency’s focus in coming months. One of the main take away lessons from the meeting: representatives encouraged tax professionals to bring all foreign accounts into compliance with applicable tax law.
This reminder shows the IRS continues to crack down on those who attempt to avoid their tax obligations through the use of foreign bank accounts.
What if I have clients who still need to report foreign accounts?
Tax professionals with clients who need to report foreign bank accounts should note that the IRS has sunset some previous programs. These programs allow taxpayers to voluntarily come into compliance. In exchange for coming into compliance, the government is more likely to show leniency with potential penalties.
One option that remains: Streamlined Procedures.
Unfortunately, those who have gone through the Streamlined Procedures process will note that it is not nearly as easy as the name would imply. The paperwork is complex and the IRS may require additional documentation. It is also important to note that lawmakers designed this process for those whose failure to comply with required tax filings non- willful. Anything that the government could deem an intentional evasion of tax obligations would need to find another way to come into compliance.
Figuring out the best way to help clients come into compliance can be difficult. A misstep can lead to increased scrutiny from the IRS. Those who find themselves under investigation are wise to seek the counsel of a legal professional to help better ensure their interests are protected.