Evaluation of an IRS Undisclosed Offshore Account IDR

The IRS has been aggressively attempting to uncover tax avoidance schemes involving the use of domestic or offshore financial accounts and arrangements. Most individuals wrongly believe that prior tax indiscretions can somehow be routinely resolved in a purely civil manner, without a criminal investigation or prosecution. However, within the past few years at least 40 U.S. taxpayers and another 20 advisers (bankers, lawyers, consultants, and so on) have been criminally indicted for activities associated with U.S. persons holding undeclared interests in foreign financial accounts. Untold others are targets or subjects of ongoing federal criminal investigations. If the initial taxpayer contact regarding an undisclosed potential interest in a foreign financial account is from the IRS, a purely civil tax resolution is no longer certain, and the likelihood of substantial civil penalties is significant. If the initial contact is from the DOJ, a purely civil tax resolution is doubtful and perhaps unlikely. Waiting is not a viable option for taxpayers who have an undisclosed interest in a foreign financial account. They should immediately pursue a course of compliance designed to avoid criminal prosecution and substantial civil penalties. Actions designed to avoid detection by the government will surely increase the potential for criminal prosecution