Our immediate concern is the prospect that the government may bring criminal tax charges against persons who attempted voluntary disclosures but were later advised that pursuant to the VDP they were not timely. Such action would effectively destroy the VDP.A copy of the letter is here. Articles appear in this morning's Tax Notes and in the popular press (WSJ article is here and the Tax Prof Blog article is here).
Thursday, May 6, 2010
Tax Practitioners Complain About Too Rigid Application of Voluntary Disclosure Program for Offshore Accounts
The tax news media is abuzz yesterday and today about a letter from a group of tax attorneys significantly involved in advising and representing clients with offshore accounts (i) who made what they thought were voluntary disclosures under the pre-10/15/09 special program and (ii) are considering a voluntary disclosure after 10/15/09 under the general voluntary disclosure program. The attorneys' concern is that the IRS is interpreting the conditions for voluntary disclosure too rigidly so as to disqualify persons who were truly voluntary in their disclosures in every meaningful sense of the word voluntary but who had the misfortune to have turned up on the IRS's radar screen (perhaps through UBS disclosures) before they could implement the voluntary disclosure. The following is a good sound bite from the letter: