1. There is and will be no acknowledgment of filing following entry into the Streamlined procedures. The cashing of checks is not an indication that the IRS has accepted the certification of nonwillfulness. If the taxpayer desires closure, the OVDP program can be used. JAT comments: Of course, the OVDP requires income tax beyond years that would be open if the taxpayer is nonwillful and requires a higher offshore penalty for those joining OVDP after announcement of the Streamlined procedures, so the cost of getting closure through OVDP is pretty great. The taxpayer could opt out of OVDP and take an audit, in which case if the taxpayer is nonwillful, the opt out audit should produce a result perhaps even more beneficial than even the Streamlined result. But it will be a hassle. So, those wanting the benefit of Streamlined are probably better off to just do the Streamlined and just accept the uncertainties involved.
2. There is no benefit to requesting pre-clearance in OVDP and then pursuing the streamlined treatment. The notion apparently is that, if the taxpayer is non-willful, he does not need the placeholder benefit that pre-clearance might offer. JAT comments: My understanding was that practitioners were using the OVDP pre-clearance followed by streamlined to have an argument that they should get streamlined if some event occurred between the pre-clearance and the submission of the streamlined documents. But, if the taxpayer really is nonwillful, ultimately bad results would not obtain even with that interim event. And, if the taxpayer is willful, the bad result can still obtain anyway.
3. The article does have this from Kathryn Keneally, former DOJ Tax AAG:
Keneally also warned practitioners they could be sending the wrong message when they use pre-clearance for their clients when it isn't needed.
"If there's a pre-clearance and then there isn't an OVDP filing, that's also saying something to the government," Keneally said. "If . . . there are treaty request responses that actually disclose those accounts, or there's a whistleblower, and that information comes forward, you're at least risking some investigation into why you tr[ied] the pre-clearance and then [did] not come in, because we have this mismatch," she said, adding that "it is not a free pass" to take such action.JAT comments: I am not sure that is inconsistent with the point in paragraph 2. I would think that the more immediate risk is that the IRS might use the pre-clearance with failed OVDP submission (nothing further done in OVDP) as a basis to do at least preliminary work for an audit. And, of course, the IRS could use information from other sources to start an audit. But, if the taxpayer is really nonwillful, an audit should not be feared, however, the IRS gets information. And, if the IRS gets information that indicates willfulness, then the taxpayer should have joined and completed the OVDP program.