By Nicholas Eusanio, Esq., LL.M
The tax attorneys at Nardone Law Group routinely advise and assist Ohio taxpayers regarding the Internal Revenue Service’s Offshore Voluntary Disclosure Program. Each taxpayer’s specific facts and circumstances are very important to determining whether or not the Offshore Voluntary Disclosure Program will be beneficial to the particular taxpayer. A taxpayer may initially begin the process of entering the Offshore Voluntary Disclosure Program, but thereafter learn that the bottom-line results may have been better had the taxpayer not entered the Offshore Voluntary Disclosure Program. The IRS has provided a remedy for this problem, known as opting out of the Offshore Voluntary Disclosure Program. Our previous article, The IRS Offshore Voluntary Disclosure Program: Penalties and Opting Out, provides an example of instances in which it may make sense for a taxpayer to opt out of the Offshore Voluntary Disclosure Program. But, a taxpayer must follow a specific procedure to opt out of the Offshore Voluntary Disclosure Program, which we discuss in our prior article titled The Process for Opting Out.
NLG Comment: Although opting out may be the right option for some taxpayers, in many cases it is best for a taxpayer to continue through the Offshore Voluntary Disclosure Program, as explained in our previous on When Opting Out May Not Make Sense.
As an update to our prior articles, we wanted to briefly highlight an important practical aspect of the decision to opt out of the Offshore Voluntary Disclosure Program, which is the fact that the IRS will then conduct an opt out audit or examination of the taxpayer related to the taxpayer’s foreign accounts or assets. As part of the IRS’ opt out examination, an IRS revenue agent will conduct an interview of the taxpayer to ask various questions and request certain documentation regarding the taxpayer’s foreign account tax reporting and payment noncompliance. This is a comprehensive interview involving numerous inquiries and requests to provide specific and voluminous information and documentation. Additionally, if issues that were not disclosed by the taxpayer are discovered during the examination interview, those issues may be subject to review by IRS Criminal Investigation.
Thus, if you are dealing with foreign account or asset tax reporting and payment noncompliance, it is very important that you engage qualified tax counsel to advise and assist you regarding the Offshore Voluntary Disclosure Program or opt out decision, and the opt out examination interview. For instance, the tax lawyers at Nardone Law Group are very familiar with the numerous questions and document requests the IRS revenue agents pose in the opt out interview, and routinely prepare our clients to handle those inquiries and requests effectively and efficiently. Having a qualified tax attorney assist you in preparing for the IRS opt out examination interview can make the difference between successfully reducing or avoiding civil penalties and possible criminal exposure and being subjected to large civil penalties and potential criminal charges.
Nardone Law Group represents businesses and individuals in federal and state tax issues, including the Offshore Voluntary Disclosure Program. If you have an undisclosed foreign account or entity, you should contact an experienced tax attorney today. Nardone Law Group’s tax lawyers and professionals have vast experience representing clients before the IRS. Our experienced tax lawyers will thoroughly review your case to determine what options and alternatives are available, including the Offshore Voluntary Disclosure Program. Contact us today for a consultation to discuss your case.