Voluntary Disclosure – Selbstanzeige in den USA

Durch erfahrene Wirtschaftsprüfer und Steuerberater in den USA®
Unreported Foreign Assets – Offshore Tax Noncompliance – Streamlined Filing Compliance Procedures

Voluntary Disclosure – Selbstanzeige in den USA

Voluntary Disclosure, or Selbstanzeige in German, is a legal process that allows US taxpayers to come forward and disclose unreported income or assets without facing criminal prosecution. This process can be complex, and it is important to work with experienced Wirtschaftsprüfer und Steuerberater in den USA® who can guide you through the process and minimize your financial exposure.

At our firm, we have extensive experience with Voluntary Disclosure, and we can provide you with a comprehensive assessment of your situation, identify any potential risks, and assist you with the preparation and submission of your disclosure. Our team can also negotiate with the IRS on your behalf and work to reduce your potential tax liability.

We understand that the decision to come forward can be difficult, but with our guidance, you can take control of your tax situation and avoid the risk of criminal prosecution. Contact us today to learn more about Voluntary Disclosure and how we can help you achieve compliance and peace of mind.

Navigating the US Voluntary Disclosure Process for Unreported Foreign Assets

Resolving US Tax Noncompliance on Unreported Foreign Assets

The 2014 Offshore Voluntary Disclosure Program (OVDP) that helped US taxpayers address foreign asset reporting failures ended on September 28, 2018. However, the IRS still offers options to resolve international tax noncompliance while mitigating penalties. This guide examines those alternatives to inform discussions with taxpayers exploring how to correct previous oversights.

Seeking Expert Guidance

Navigating IRS disclosure procedures and ensuring accurate filings is complex. We highly recommend consulting experienced Wirtschaftsprüfer und Steuerberater in den USA® who routinely handle offshore tax matters. They can:

  • Thoroughly assess your situation and risks
  • Determine the most suitable IRS program for your circumstances
  • Ensure correct process execution and document preparation
  • Negotiate with the IRS on your behalf as needed
  • Provide critical advice for demonstrating reasonable cause and good faith
IRS Offshore Compliance Enforcement

Priorities and Risks

  • The IRS continues aggressively pursuing offshore noncompliance through audits, prosecutions and whistleblower leads
  • Since 2009, over 1,500 taxpayers faced criminal charges concerning international tax issues
  • Complacency carries significant danger of tax penalties and criminal liability
Burden of Proof Falls on Taxpayers
  • Taxpayers must show reasonable cause and good faith to avoid tax penalties
  • Seeking professional tax advice can help demonstrate reasonable cause
  • Most criminal tax prosecutions originate from civil IRS examinations
Utilizing IRS Streamlined Filing Procedures

The  Streamlined Filing Compliance Procedures introduced in 2014 for taxpayers with unreported foreign income and missing international information returns or FBARs

  • A more accessible, lower-cost way to become compliant, available for both US residents and expatriates
  • IRS scrutinizing “non-willful” certifications much more closely in recent years
Benefits and Precautions
  • Streamlined procedures can minimize penalties for taxpayers acting in good faith
  • However, false or inaccurate streamlined submissions may trigger severe IRS penalties
  • Carefully following all filing instructions is critical, preferably with experienced advisory support
Resolving International Filing Delinquencies

Other IRS Options: Beyond streamlined procedures, other main alternatives for addressing international filing issues include:

Each option has specific eligibility conditions, filing processes and penalty frameworks requiring close review. The stakes are high when dealing with international tax enforcement actions.

For further guidance on addressing your offshore tax noncompliance, please get in touch with us. We are one phone call away; +49 89 2351 3218 or +1 914 816 1115 after 15h (9 am ET). We, your Wirtschaftsprüfer und Steuerberater in den USA®, will assist you in determining the most appropriate solution for your situation.

A Closer Look at the IRS Criminal Investigation Voluntary Disclosure Practice

IRS Criminal Investigation Voluntary Disclosure Practice Explained

The IRS Criminal Investigation Voluntary Disclosure Practice (CI VDP) serves as a pathway for taxpayers who might have committed criminal acts to voluntarily disclose their past actions and come into compliance with the tax system. This practice enables individuals to avoid criminal prosecution while addressing their tax obligations.

Key features of the CI VDP:

    a. Eligibility: Taxpayers with legal source income who willfully failed to report their foreign assets can use the CI VDP. The practice does not apply to taxpayers under a civil examination or criminal investigation nor to those who have disclosed their noncompliance to the IRS.
    b. Disclosure Process: To begin the disclosure process, taxpayers must submit a preclearance request to the IRS Criminal Investigation Division. Once preclearance is granted, taxpayers must provide detailed information on their foreign assets, financial institutions, and facilitators involved in non-compliance.
    c. Penalties: Under the CI VDP, taxpayers will likely face civil penalties for noncompliance, including a penalty for failing to file a Report of Foreign Bank and Financial Accounts (FBAR) and penalties for failing to submit required information returns. However, by participating in the CI VDP, taxpayers can avoid criminal prosecution.
    d. Timeliness: Taxpayers need to act promptly and voluntarily disclose their offshore tax noncompliance before the IRS initiates any investigation or examination.

By utilizing the IRS Criminal Investigation Voluntary Disclosure Practice, taxpayers can mitigate the risks associated with unreported foreign assets, ensuring compliance with US tax laws and avoiding potentially severe criminal penalties.

To learn more about Criminal Investigation Voluntary Disclosure Practice, please reach out to us or contact us by phone; +49 89 2351 3218 or +1 914 816 1115 after 15h (9 am ET). Our team of knowledgeable Wirtschaftsprüfer und Steuerberater in den USA® will assist you.

Understanding the Streamlined Filing Compliance Procedures for US Taxpayers

Addressing Previous Failures to Comply with US Tax and Information Return Obligations

The Streamlined Filing Compliance Procedures help US taxpayers correct past failures to comply with US tax and information return obligations regarding foreign investments. Although returns submitted under these procedures are not automatically subject to an IRS audit, they may still undergo examination, additional civil penalties, or criminal liability if deemed appropriate.

1. Streamlined Filing Compliance Procedures Overview

The IRS offers two different Streamlined Filing Compliance Procedures:

2. Additional Filing Procedures

Alongside the Streamlined Filing Compliance Procedures, the IRS provides other filing options:

3. Forms Required for Streamlined Filing Compliance Procedures

The Risks of Quiet Disclosures and the Importance of Compliance

The IRS strongly discourages “Quiet Disclosures,” which involve filing amended returns, delinquent FBARs, and paying tax and interest for previously unreported income from offshore assets without notifying the IRS. Unlike voluntary disclosure, quiet disclosures do not protect taxpayers from criminal prosecution. The IRS reviews all quiet disclosures and may impose civil or criminal penalties as appropriate ( IRM 4.63.3).

FATCA Regime and Its Impact on US Taxpayers’ Compliance

The Foreign Account Tax Compliance Act (FATCA) requires US taxpayers to disclose specified foreign assets exceeding certain thresholds. It also mandates foreign institutions to disclose US account holders or face a 30% withholding tax on specific payments from the US. The US has entered into bilateral intergovernmental agreements (IGAs) to implement FATCA’s information reporting and withholding tax provisions, allowing US authorities to access information on accounts held abroad by US persons. Noncompliant US taxpayers should consider reporting their foreign assets instead of risking discovery by the IRS and potential criminal prosecution.

Beginning in 2020,  expatriate US persons must provide their US tax identification number (TIN) to their local banks, or risk having their bank accounts closed or frozen.

For more information on the Streamlined Filing Compliance Procedures or FATCA, please contact us or call +49 89 2351 3218 or +1 914 816 1115 after 15h (9 am ET). We are your Wirtschaftsprüfer und Steuerberater in den USA®.