If you hold financial assets in a country other than the United States, and you have not reported it to the IRS or income derived from those assets, you are at risk of incurring significant penalties. Fortunately, a Rockville streamlined foreign offshore procedure lawyer may be able to help. An experienced offshore disclosure attorney could identify your areas of exposure, determine whether you are eligible for the streamlined foreign offshore procedure (SFOP), and craft a plan that allows you to safely come into compliance.
Being a United States citizen or Green Card holder comes with both benefits and obligations under the law. Among these is the requirement to pay taxes, even if the jobs in question took place while living in other nations. The non-payment or non-reporting of these taxes could lead to costly penalties, and potentially even a criminal investigation under certain circumstances. The IRS has set up the ability for taxpayers to legally disclose these financial assets even after the reporting deadline. There are three general requirements a taxpayer must meet to be eligible for SFOP: non-willfulness, residency, and to not be under audit.
Although the IRS has not made a clear definition as to what “non-willful” means, an SFOP attorney can examine the entire circumstance to help determine if the IRS analysis might come down on the side of willfulness.
A Rockville SFOP attorney assists individuals in determining if they fit the residency requirements for the IRS’s streamlined disclosure process. There are two streamlined programs: domestic and foreign. U.S. citizens or Green Card holders meet the requirement for the foreign procedure if they did not have a U.S. abode or they lived outside of the U.S. for at least 330 days in the year, in the most recent three years
There can be some understandable confusion as to who technically counts as a non-resident or how much time in the country is considered a “substantial presence.” Our law firm works with a taxpayer to confidently identify their status and determine which procedure to use.
If a taxpayer is currently being audited by the IRS, they are not allowed to use the SFOP. They should contact an SFOP attorney if they decide to come into compliance on their own volition.
Unlike the streamlined domestic procedure, those who qualify for the streamlined foreign procedure can apply even if they have not filed taxes (specifically a Form 1040) for the past three years.
Once it becomes apparent that an individual meets all the requirements for the streamlined foreign offshore procedure, a Rockville attorney carefully navigates them through the submission process. A person seeking the benefits of this process must submit delinquent or amended tax returns for the three most recent tax years. This submission must include all required informational forms, such as 3520 or 8938, as well as a written narrative explaining why the failure to report was non-willful in nature. Individuals seeking to use this process must also submit Foreign Bank and Financial Account records (FBAR) for the past six years. Finally, the submission must include the payment of all overdue taxes and interest.
If there are errors with the submission and the IRS rejects it, that leaves the taxpayer vulnerable to penalties and a criminal investigation into tax fraud. The value of working with a dedicated tax lawyer is in having someone who can make sure all bases are covered when submitting the disclosure. These can be highly sensitive situations that require specific actions in order to meet the IRS requirements.
If there was a misunderstanding and you did not report your foreign-based financial assets to the IRS, it is not a good idea to ignore it and hope that the government will not notice. The IRS still asks for compliance in these situations, which is why they set up various disclosure options.
In an effort to bring as many foreign-based taxpayers into compliance as possible, the SFOP does not impose an offshore penalty. A Rockville streamlined foreign offshore procedure lawyer can provide a skilled assessment of your current tax profile and work to put you in the best position to disclose foreign financial assets. Fill out a contact form to set up a confidential consultation.
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.