- Stever Toscher and Della Bauserman, Suprise-The Tax Fraud of YOur Tax Preparer May Extend the Statute of Limitations on Tax Assessments, J. Tax Prac. & Proc. 31 (April-May 2013), here.
The authors review the wreckage from Allen v. Commissioner, 128 T.C. 37 (2007). Although I have written about Allen before, this excerpt should remind readers.
The issue in Allen was whether the taxpayer must have an intent to evade tax in order to keep the statute of limitations on assessment open indeﬁnitely under Code Sec. 6501(c)(1). The Tax Court concluded the statute of limitations would remain open if the tax preparer had the intent to evade tax. To state this conclusion another way, the Tax Court allowed the statute of limitations on assessment to remain open forever when the tax preparer has fraudulently ﬁled a tax return even if the innocent taxpayer was also defrauded by the tax preparer. This was a startling proposition—at least at ﬁrst blush—for most of us in the tax litigation ﬁeld.
- Josh Ungerman, What to Do When the Special Agent Arrives (Outline for speech at the Tax Alliance Conference 6/12/13), here.
Josh offers some good insights on the initial surprise "interview" by Special Agents and then damage control after it occurs.
- Charles P. Rettig, IRS Offshore Voluntary Disclosure Program: Opt-Outs, a Revised FBAR and Rescissions of Pre-Clearance Letters by Criminal Investigation, J. Tax Prac. & Proc. 23 (April-May 2013), here.
Chuck provides some timely information about developments in the offshore account area, including most prominently (i) summary observations on joining OVDP in the first place and then in opting out and (ii) lines of inquiry that might be asked by the agent on the opt out or an AUSAs or IRS agent assisting a grand jury investigation of enablers.
- Edward M. Robbins, Jr., The Fifth Amendment FBAR Lives!, 139 Tax Notes 1546 (June 24, 2013) [no link for this yet, but will post it when I get it; in the meantime, readers might check his firm's publications page here]
Ed provides a very tight but enlightening on review of the required records area which has been ugly for noncompliant offshore account holders lately, but concludes that all may not be lost:
In short, some might assert that the required records doctrine applies to the annual FBAR reporting requirement just as much as a subpoena for offshore account information. However, the foregoing cases stand for the proposition that the Fifth Amendment does not apply to the production of previously existing documents, whether they are records maintained for inspection or records required to be filed periodically with officers of the United States. They also stand for the noncontroversial proposition that the Fifth Amendment will not excuse a person from creating records required to be filed periodically with the government. These cases do not suggest that a person may be compelled to give current testimony over a Fifth Amendment objection, beyond the testimony inherent in the act of production. Recall the testimony allowed in the required records cases over a Fifth Amendment objection: (1) the records I am producing in response to the subpoena exist; (2) the records are in my possession or control; and (3) the records are authentic, that is, the records are those described in the subpoena. There is no suggestion in any of these cases that a foreign bank account holder can be hauled in front of a grand jury and compelled, over his Fifth Amendment objections, to orally answer each and every question included on the FBAR. Likewise, the foreign account holder cannot be compelled, over his Fifth Amendment objections, to file a true and complete FBAR.
Accordingly, it appears that a good-faith Fifth Amendment FBAR is currently alive and available as a defense tactic in the appropriate situation.