Failing to pay one’s taxes is among the most common forms of tax controversies that affect individuals in the Rockville area. For most U.S. citizens and lawful permanent residents living and working in the United States, the basic penalties and interest payments will apply when attempting to solve these controversies. However, special rules may apply when taxpayers owe payments on offshore accounts and other financial assets that exist in foreign countries. By utilizing the Streamlined Domestic Offshore Procedures, the IRS may waive the usual failure-to-file and failure-to-pay penalties.
A Rockville streamlined domestic offshore procedure (SDOP) lawyer may be able to help you solve your tax controversies related to the non-payment of taxes on offshore holdings. This could include determining your eligibility for this program and guiding you through the process to come into compliance safely.
An apparent failure to pay one’s taxes is a serious matter that can come with significant penalties. It may be possible to avoid these penalties under specific circumstances. The goal of a streamlined domestic offshore procedure attorney in Rockville is to determine if someone is eligible for the program and carefully guide them through it.
If successful, the taxpayer would only be required to pay a 5% penalty (which is based on the highest aggregate account value on the FBAR among the years submitted). However, a taxpayer could be deemed ineligible if the IRS determined they were willful in not disclosing their financial assets or if they did file a tax return in the previous three years. Due to the risk of being ineligible for SDOP and being hit with the bigger penalties, it is vital to have a Rockville streamlined domestic offshore procedure attorney analyze the current situation and determine the safest way to move forward.
Unfortunately, not every person who owes back taxes on offshore accounts and holdings will be eligible for the domestic offshore procedure. The first element that someone must satisfy is the residency requirement. According to the Internal Revenue Service, there are four general requirements to participate in the SDOP: residency, non-willfulness, current compliance with filing requirements, and to not be under audit.
The individual seeking relief must be a United States citizen or a Green Card holder. In addition, this person must have their abode in the U.S. or at least pass the substantial presence test. In short, this test requires a person to have been in the country for at least 183 days out of the past year.
A taxpayer’s non-compliance must be non-willful. The IRS does not have a clearly articulated definition of non-willful. Whether the non-compliance was non-willful or not is viewed in a totality of the circumstances analysis, something an experienced SDOP attorney can assist in determining.
To be eligible for relief, a person must have filed a tax return for the past three years.
Finally, the IRS will not allow a taxpayer to use the SDOP if they are currently under audit. These procedures are very beneficial to taxpayers who are making the effort on their own to come into compliance. It is important to contact an experienced SDOP attorney once a taxpayer realizes they are not in compliance.
If an individual meets these criteria, they may submit an amended tax return that discloses these assets. This program is for individuals who live within the United States, whereas the streamlined foreign procedure is for those who live in another country. A Rockville SDOP lawyer could assist someone who is unsure of which program they should utilize due to continuous travel in and out of the country.
If you have not included all of the required information related to foreign accounts or assets, or have not filed your FBARs and are concerned about being audited or incurring significant penalties, you have an opportunity to come into compliance and reduce the penalties related to non-compliance. The IRS created the SDOP to encourage taxpayers with unreported foreign assets to come into compliance with minimal penalties.
A Rockville streamlined domestic offshore procedure lawyer is ready to assist with this process. We can analyze your tax history and advise which disclosure program is the safest way for you to become tax compliant. Contact us today to alert us of your situation.
Pontius Tax Law, PLLC is a tax law firm that strives to resolve sensitive tax problems through trust, dedication and value. The law firm was founded by John Pontius with offices in Washington, DC, Rockville, MD, Bethesda, MD, Vienna, VA, and Alexandria, VA. Mr. Pontius represents individual and business clients with sensitive and serious tax matters before the Internal Revenue Service and state taxing authorities. His client base is local, national, and international.
Over the course of his career, Mr. Pontius has represented businesses and individuals with complex tax issues in the following areas: FBAR examinations, offshore and domestic disclosures, FATCA, FIRPTA, tax planning, unfiled tax returns, release of tax liens and levies, trust fund recovery penalty, IRS and state audit examinations, as well as appeals, penalty abatement, U.S. Tax Court litigation, along with defense of tax fraud and evasion. If you require assistance from a tax lawyer, contact Mr. Pontius to discuss your situation.