The California Asset Protection Lawyer You Want As Your Attorney, Sebastian Gibson
Offshore Asset Protection - Voluntary Disclosure of Offshore Accounts Advice by International Offshore Asset Protection Attorneys
If you’ve been searching for California asset protection lawyers or offshore asset protection attorneys in California and haven’t found the asset protection attorney in which you can be confident when retaining a lawyer for your asset protection, voluntary disclosure, offshore trust protection and family limited partnership matters in California, Sebastian Gibson is the asset protection attorney you’ve been looking for.
California Asset Protection Lawyer
With over thirty years of experience handling international matters, with law degrees in both California and in Great Britain, and years of international experience in London as well as decades of experience in California, California asset protection lawyer Sebastian Gibson brings a wealth of experience to the table and was chosen one of the 2011 Top Lawyers by Palm Springs Life Magazine.
International offshore asset protection advice by attorneys requires presenting clients with the consequences of voluntary disclosure of their offshore accounts.
Today, the 2009 Voluntary Disclosure Program deadline has passed. Over 14,700 taxpayers took advantage of the program. But that’s only the tip of the iceberg. So where does that leave the taxpayer who failed to take advantage of the program? In need of legal advice as soon as the taxpayer is able to face their problems.
Following the program’s expiration, the IRS vowed to reevaluate the framework and decide whether or how to continue the practice going forward. However, most practitioners today feel that the IRS has painted itself into a corner and will be unable to allow taxpayers to voluntarily disclose their prior wrongs going forward without paying stiffer penalties than those offered under the 2009 program.
In the interim, the IRS continues its efforts to learn of taxpayers who have failed to disclose offshore accounts amid bank secrecy coming to an end. For those who have forgotten the rules or pushed them out of their mind, U.S. citizens and resident aliens are taxable on their entire worldwide income, including their interest and dividends from foreign investments and must report foreign offshore accounts yearly in which they have an interest or signature authority and in which the value exceeds $10,000.
Penalties just for failing to file the FBAR, Report of Foreign Bank and Financial Accounts by June 30th each year, can be the greater of 50% of the total balance of the foreign account or $100,000.00, and there is no cap on the amount that can be penalized. An account with one million dollars in assets can thus incur penalties for the taxpayer who fails to report it for six years of three million dollars.
As it turns out, the civil statute of limitations for failing to file the FBAR yearly, is six years. And if that isn’t enough to keep a taxpayer up at night, the statute of limitations for criminal prosecution for failing to file FBARs is five years. The criminal penalties for failure to file an FBAR are up to $250,000 and five years imprisonment and $500,000 and ten years imprisonment if in tandem with violation of any other U.S. law.
Worse yet, the statute of limitations on prosecution for tax evasion with respect to income from an offshore account is six years, starting from the date the tax return is due, or if later, the last affirmative act of evasion by the taxpayer. In the event the Criminal Investigation Division makes a referral to the U.S. Department of Justice for a felony indictment of a taxpayer, the taxpayer can face five years in prison and fines of up to $250,000. Penalties and fines vary.
To enjoy the likelihood of avoiding criminal prosecution today for failing to report income and/or offshore accounts, a voluntary disclosure must be completely truthful, the taxpayer must be fully cooperative, and must make a good faith agreement to either pay the IRS in full, including any taxes owed, interest and whatever penalties the IRS should determine to be applicable, or make arrangements to pay such amounts over time. The criteria for what constitutes a voluntary disclosure are numerous and restrictive, and there are no guarantees that even with voluntary disclosure, a taxpayer will avoid criminal prosecution.
In addition, voluntary disclosure is only available as to income derived from legal sources. A voluntary disclosure must also take place before the IRS has begun a civil examination of the taxpayer or a criminal investigation, or notified the taxpayer it is in the process of such or intends to proceed in this manner. It must also commence before the IRS receives information regarding the taxpayer from a third party, such as a whistle blower, or as a result of a civil examination or criminal investigation specifically related to the taxpayer.
A taxpayer who makes a voluntary disclosure is not required to make an immediate full payment of the taxes, interest and penalties he or she owes if the taxpayer does not have the ability to do so. However, the taxpayer will have to make other arrangements.
Over the years, examples have been provided by the IRS as to what constitutes and what does not constitute a voluntary disclosure. International offshore asset protection attorneys are thus able to determine with some degree of accuracy what is required in order to constitute voluntary disclosure of a client’s offshore accounts.
Voluntary disclosures may not be made anonymously. Should the information provided be less than truthful or the amended tax returns not be completely accurate, a taxpayer can find themselves in additional trouble. This is not the time to push the envelope in claiming deductions. If the amended tax returns are not accurate, the taxpayer’s problems may be compounded.
Whereas at the start of the 2000s it was believed that the IRS had its focus more on the promoters of tax avoidance schemes than individual taxpayers, today with the government facing larger and larger deficits, and the IRS today having already broken down the doors of such promoters and enablers, it is the opinion of this writer that the IRS has the wind at its back and will now be focusing its efforts on the prosecution and collection from individual taxpayers. For every one that is prosecuted, it’s likely that the reverberations will cause a hundred to step forward out of the shadows and voluntarily disclose their wrongdoing.
Indeed, as evidence of the new focus of the IRS, when the Commissioner of the Internal Revenue Service testified before the Senate Finance Committee in March of 2009, he testified as to the unprecedented focus the IRS has now placed on detecting and bringing to justice taxpayers who have been hiding their assets overseas in order to avoid paying their U.S. taxes.
In order to find those taxpayers who have been concealing taxable income, the IRS has been turning the screws on financial institutions to cough up the identities of customers concealing their income from U.S. authorities.
During the 2009 Voluntary Disclosure initiative, at first the IRS refused to pre-clear taxpayers and check its databases and the IRS information on a specific taxpayer in order to determine whether it had any information that would make a taxpayer ineligible for a voluntary disclosure. The IRS then began to pre-clear taxpayers however, it was believed by some practitioners that the IRS offices were not pre-clearing by using the same methods or databases.
The trouble with attempting to pre-clear a taxpayer is that disclosure does not occur until the taxpayer’s identity is revealed along with the promise to pay the tax, interest and penalties by the taxpayer, thus creating a situation where by the time disclosure occurs, the IRS might very well already have gained such information from other sources.
When the 2009 Voluntary Disclosure program went into effect, the IRS guidance recommended submitting a letter to the Special Agent in charge of the local IRS Criminal Investigation Division (CID) Office. It was recommended that the letter provide the taxpayer’s name and identifying information, a brief explanation of the taxpayer’s problems with previously filed returns, and if ready, the amended returns. This procedure was recommended even if the taxpayer had tried to accomplish a "quiet disclosure" previously by submitting amended returns without payment of any penalties or an accompanying letter fessing up.
Today, the IRS is continuing to step up its investigative and enforcement efforts, it continues to use John Doe summonses and it continues to receive information from offshore banks and whistleblowers and other taxpayers making voluntary disclosures.
For a disclosure to be considered voluntary, it must be timely, that is, it must occur before the IRS is already investigating the taxpayer or has information alerting the IRS as to the taxpayer’s noncompliance. In today’s climate where the IRS has already collected a wealth of information and is obtaining more by the day, a taxpayer wanting to come forward risks that he or she will already be too late to avoid criminal prosecution.
A taxpayer may not make a partial voluntary disclosure and then claim the Fifth Amendment and refuse to cooperate or refuse to provide financial information relating to their claim of an inability to pay their taxes, interest and penalties in full. In some cases, the IRS has insisted on taxpayer interviews.
The civil review of voluntary disclosures takes a great deal more time than most taxpayers would expect and a significantly greater amount in legal and accounting fees. The level of review can be best described and "intrusive" and the time involved in civil examinations as "extensive."
In compliance with IRS requirements, we must advise you that as international offshore asset protection attorneys, any U.S. federal tax advice including advice on voluntary disclosure contained in this informational article is not intended to be used nor is it published in order for it to be used and you may not use it for the purpose of avoiding penalties or fines under the Internal Revenue Code. It is not intended to be used nor is it being published in order to promote, market or recommend any specific transaction, tax-related matter or estate planning tax scheme to any party.
California Asset Protection Attorney, Sebastian Gibson
Sought out to be a writer for California’s two largest and most prestigious legal newspapers, California asset protection attorney Sebastian Gibson’s articles have been published in the Los Angeles Daily Journal and the San Francisco Daily Journal. Today thousands and thousands of people visit this website and his blogs monthly for useful advice and thousands more follow him on Twitter for his humor.
One of the best asset protection attorneys for people in California to follow for his humor and wit, one of the funniest California asset protection lawyers as well as one of the top humorous California asset protection attorneys people follow on Twitter, California asset protection attorney Sebastian Gibson has been called "brilliant," "hilariously funny" and a "legend."
It matters more than you think who you call for your asset protection and other legal matters. When it matters most, call California asset protection lawyer Sebastian Gibson. When it’s time to hire a California asset protection attorney, hire a legend.
