tag:blogger.com,1999:blog-1519969502186924526.post4763497900581797241..comments2023-10-24T08:00:53.865-05:00Comments on Federal Tax Crimes: The New Streamlined Processes' Requirement of Certifying Non-Willfulness (6/19/14; rev'd 6/21/14)Jack Townsendhttp://www.blogger.com/profile/14469823736335455874noreply@blogger.comBlogger55125tag:blogger.com,1999:blog-1519969502186924526.post-56225877913256978992014-06-23T09:30:53.183-05:002014-06-23T09:30:53.183-05:00Agreed. However, with over 600 million pages of Co...Agreed. However, with over 600 million pages of Code, your vision is idealistic.Milan Madhani, CPAhttp://www.vimlantax.comnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-29231989100973430822014-06-23T05:39:24.557-05:002014-06-23T05:39:24.557-05:00I would have thought that would be a better fact p...I would have thought that would be a better fact pattern than checking "no". It would show that there is no "intent" to hide the account (not that "intent to hide" is the relevant legal standard, just that one would hope the IRS would take it into account)gottaloveUStax1noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-14473646665628402642014-06-22T22:05:54.594-05:002014-06-22T22:05:54.594-05:00Thanks Michael.
I think that is the right answer....Thanks Michael.<br /><br />I think that is the right answer. I have not heard that the IRS is treating QD's more harshly. I have heard that the IRS would prefer some disclosure strategy (OVDP with opt out if necessary) over QD, but I haven't heard that the IRS is punishing quiet disclosures by more onerous audit treatment.<br /><br />Jack TownsendJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-68545728485988690552014-06-22T22:03:59.165-05:002014-06-22T22:03:59.165-05:00Thanks for your comment.
Jack TownsendThanks for your comment.<br /><br />Jack TownsendJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-24507614801793217642014-06-22T21:52:09.440-05:002014-06-22T21:52:09.440-05:00Also, Michael, almost every successful opt out tha...Also, Michael, almost every successful opt out that I have heard of (including for my own clients) have answered no to the question. This is consistent with John McDougal's indication that a no answer is, by itself, not proof of willfulness. There must be more and that more must be damaging.<br /><br /><br />Jack TownsendJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-74379766302322685932014-06-22T17:01:53.329-05:002014-06-22T17:01:53.329-05:00Asknot,
The language of those cases is, indeed, ...Asknot,<br /><br /><br />The language of those cases is, indeed, very broad. However, I have heard people from the IRS say -- and I believe -- that they do not consider the checking of the "no" box, by itself, to demonstrate willfulness. Having said that, if there is some other meaningful sign of willfulness, the IRS might well decide the the no box, along with the other factors, is sufficient to demonstrate willfulness.Michael J. Millernoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-79564081635886882142014-06-22T15:59:16.232-05:002014-06-22T15:59:16.232-05:00Not everyone "waited." Many only just fo...Not everyone "waited." Many only just found out about this FBAR requirement. I can tell you that pretty much every domestic U.S. taxpayer I know has still never even heard of this. And not everyone fills out a Schedule B. If the foreign reporting was so important to the US, you would think they would put it front and center on form 1040 (for those who know they have to file something), so that people would know they have a form they need to look out for. Hiding a question on a schedule many don't fill out isn't exactly honest on their part. Actually, I think it's a sign of willfulness on their part that they were attempting to trap people. I think it really stinks for those who have already closed and I hope the U.S. does right by the ones who would have qualified for the new streamlined, but the one benefit all those who paid the *cough* extortion tax, I mean penalty, is that they can have peace of mind that the US will no longer come after them for those years and that they aren't sitting around waiting for the ax to fall with multiple and higher penalties.Anna Rnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-9871260317046391402014-06-22T15:47:14.181-05:002014-06-22T15:47:14.181-05:00Michael, I was thinking perhaps the note about the...Michael, I was thinking perhaps the note about the IRS being harsh with QDers was paraphrasing what we've heard about the IRS being on the lookout for GF or QD reporting, but then it mentions auditors, which I read as referring to examiners. Or maybe it refers just to whoever it is who decides what and what not to audit in which case it's just consistent with their seeking out QDers.<br /><br /><br />However, even if they have a mandate to treat QD harshly, they can still be honest in determining willfulness or non-willfulness, but maybe it's in the application of discretion that they get harsh. Don't they have discretion in a non-willful case to accept the reasonable cause excuse or not, and to mitigate penalties? I think that discretion is where things can get ugly on the part of the govt. giving QDers "special treatment" over those who opted out of OVDI.<br /><br />For example, if I understand correctly, they can choose to NOT to stick someone with multiple $10000 penalties (I just imagine them going after someone non-willful who has some 30 accounts containing mostly small balances from rolling over CDs or chasing down promotional interest rates who decided OVDI wasn't meant for them and didn't know they had to file for five years and sticking them with 30 x 5 x $10000, which would be $1,500,000) and instead apply one $10000 penalty for each year of non-filing (how they can justify a penalty per account when there can only be one violation of not filing an FBAR per year is beyond my comprehension, and sounds de facto punitive, rather than a penalty, for a form violation), or even just one $10000 penalty per taxpayer acting non-willfully, or perhaps even NO penalty for someone acting non-willfully. Am I incorrect in understanding that there is that discretion?<br /><br /> Thank you for your voice of reason amongst all those pushing OVDP as the only option.Anna Rnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-88690795791842800452014-06-22T13:50:30.113-05:002014-06-22T13:50:30.113-05:00If someone had checked the "yes" box on ...If someone had checked the "yes" box on Schedule B and then failed to file FBAR for some reason will that be a "willful" or just gross negilgence?expattobenoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-78206307840763327382014-06-22T10:39:31.323-05:002014-06-22T10:39:31.323-05:00Mr. Miller
Given that the DOJ has managed to win ...Mr. Miller<br /><br />Given that the DOJ has managed to win court cases implying that checking 'No' on the Schedule B question indicates willfulness (or willful blindness), could it even be considered out of line if IRS auditors were to use that question (maybe a 'no' for several years, not just one) as a sign of willfulness ? IRS lawyers can always say they have court backing for this (at least for US residents).asknotnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-26833935286130556712014-06-22T10:04:34.345-05:002014-06-22T10:04:34.345-05:00Jack, as much as I think that GC's rhetoric on...Jack, as much as I think that GC's rhetoric on this is a bit hyperbolic, I think your above comment is a bit harsh. There is nothing wrong with the claim that CBT is unfair/unjust or that for an expat whose whole financial life is outside the US, the fbar and fatca reporting regimes are an intrusive and unnecessary requirement and indeed, a violation of basic privacy rights. I don't think it is fair to compare those claims with the silliness of people who say, I don't have to pay tax because I don't want to.gottaloveUStax1noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-90728802309942793582014-06-22T08:55:16.193-05:002014-06-22T08:55:16.193-05:00Anna,
I don't doubt that you read that on a ...Anna,<br /><br /><br />I don't doubt that you read that on a blog, but maybe it's true and maybe it isn't. The IRS has a responsibility to fairly determine the willfulness, or non-willfulness of a taxpayer as of the time of the violation. If the IRS is instructing its auditors to be "harsh" with quiet disclosures, that sounds to me like it's instructing them to be dishonest in making that determination. I do not lightly assume that the IRS would act dishonestly (although, with current events in the news, that may be naive on my part), so I am skeptical as to whether this truly reflects IRS policy.Michael J. Millernoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-30212977225298533502014-06-22T06:33:04.098-05:002014-06-22T06:33:04.098-05:00In my book, for normal individuals (wage earners),...In my book, for normal individuals (wage earners), any filing requirements that are so complicated that you need the help of a "practitioner" are an outrage. As I see it, money you must pay to a practitioner is the same as a tax. (It's different if you engage the practitioner out of laziness.)<br /><br /><br />Filing requirements and instructions for the streamlined procedure need to be easy and understandable enough that you can do it yourself.Sallynoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-88855713975107567942014-06-22T03:09:27.413-05:002014-06-22T03:09:27.413-05:00I found this on the the-tax-wars.net blog: "...I found this on the the-tax-wars.net blog: "IRS has instructed its auditors to be harsh with quiet disclosers." so I guess the IRS did expect people to go through the whole rigamarole of OVDP and then opt out (incurring legal expenses along the way), and they probably consder that now there is a way for everyone (well, almost everyone due to the unfortunate gap non-residents who spent more than 5 weeks a year in the U.S. while still less than the substantial presence test, fall into) to have an appropriate method by which to VD - either OVDP for willful or streamlined for non-willful.Anna Rnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-45546723169142514622014-06-22T01:35:06.367-05:002014-06-22T01:35:06.367-05:00Hope it isn't something like a 2.5% whack for ...Hope it isn't something like a 2.5% whack for daring to take a long vacation in the U.S. Even foreign visitors with a visa get 3 months.Anna Rnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-35040127202058056962014-06-22T01:13:01.463-05:002014-06-22T01:13:01.463-05:00It definitely is quite a whacking. When we figured...It definitely is quite a whacking. When we figured out that our relative would not meet the requirements for non-resident streamlined, we thought she'd participate under the resident streamlined (which she doesn't), and realized that her staying in the country for two weeks more than allowed for non-resident streamlined was going to be the most expensive vacation to the U.S. she ever could have imagined, on par with Beyonce and Jay Z spending a week on one of those mega yachts in San Tropez. So for the total of six extra weeks over three years, she'd be penalized more than twice the amount of the yearly average U.S. income, about $16,000 per week she was in the country too long to qualify for non-resident streamlined. Crazy.Anna Rnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-64998638127758104402014-06-22T00:59:54.190-05:002014-06-22T00:59:54.190-05:00Thank you Michael. Jack has already responded with...Thank you Michael. Jack has already responded with my thoughts. While the IRS hasn't said one will be treated more favorably than the others, they have indicated they're on the lookout for those doing QD (and this was when there was really no option for non-willful except the draconian OVDI/P), so that alone sounds like they would be less lenient.Anna Rnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-52898861213490585022014-06-22T00:51:31.067-05:002014-06-22T00:51:31.067-05:00On a side note, I want to address the criticism pe...On a side note, I want to address the criticism people who say they'll renounce their U.S. citizenship due to the difficulties posed by citizenship-based taxation. People call them unpatriotic, say to them good riddance, but I've never heard anyone put themselves in that other person's shoes and imagine what it would be like. I'm also a dual citizen by birth (and parentage), but I've always lived in the U.S. It's challenging enough to get my taxes done here every year that it would be awful If all my working and retired life I had to then do a second set of returns and calculations and pay tax in a country I don't live in. I'd be the first to renounce. So if anyone hears or reads a criticism of those renouncing, tell them take a minute and think what it would be like if every year they had to hire (and pay) a foreign accountant to do a second set of returns (and all the record keeping that entails). Would they really be so angry at people giving up their citizenship then? I wonder if Chuck Schumer and his co-sponsors ever considered this when they spent however many taxpayer dollars putting the Ex-PATRIOT Act through just to punish a tiny fraction of taxpayers.Anna Rnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-90328615528612144302014-06-21T23:46:21.606-05:002014-06-21T23:46:21.606-05:00Haha, good one! It's a Snowbird Hunt. Thank y...Haha, good one! It's a Snowbird Hunt. Thank you for adding what you've heard. That would be a relief. It was weird that the options were 1. streamlined for non-willful person in the U.S. more than 35/36 days who filed returns, 2. streamlined for non-willfull person out of the U.S. 330 days or more who didn't file anything, and 3. OVDP for non-willful person who is domiciled out of the country and didn't do any filings for the same reasons as person 2, which means they didn't file incorrect returns like person 1, but visited the U.S. for too long (yet wouldn't qualify under the substantial presence test as a U.S. resident except for their green card).Anna Rnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-53015960327901422032014-06-21T16:18:09.542-05:002014-06-21T16:18:09.542-05:00You echo my thoughts sks..
It's few people l...You echo my thoughts sks..<br /><br /><br />It's few people like Just_Me and Jack (who should be named GodSend for minnow immigrants) that make the world worth living for.Desi bnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-44218044162085505312014-06-21T15:20:38.046-05:002014-06-21T15:20:38.046-05:00I too thank you, Just_Me_Also. Your expertise and ...I too thank you, Just_Me_Also. Your expertise and experience has been helpful to a lot of taxpayers and tax professionals as well. <br /><br /><br />Jack TownsendJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-13124713563973324912014-06-21T15:09:43.879-05:002014-06-21T15:09:43.879-05:00Thanks Jack, that's very kind. I've had m...Thanks Jack, that's very kind. I've had more than a few discussions with tax advisors who feel the heavens will come crashing down if one is audited following a QD, so it's nice to hear another sane voice.Michael J. Millernoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-19764016816693374812014-06-21T15:05:53.091-05:002014-06-21T15:05:53.091-05:00Just_Me , Let me thank you for effort and time whi...Just_Me , Let me thank you for effort and time which is indirectly helping lot of people. <br /><br />Majority of Immigrants never knew about global taxation and FBAR. Especially immigrant people from countries like INDIA who came to work in US for few years on H Visa and L Visa. Now the sword is hanging on these innocent people. Do they really deserve 5% penalty while most of these people are non-citizen and temporarily living in US to work and earn some money and go back to their home country. IRS should not set the wrong precedence and should be forgiving. Should not try to interpret willful and non willful based on<br />defined set of findings when they clearly know that non compliance is due to not knowing the obligation.<br /><br />Just Me , You good work is highly appreciated Let me mention a quote here ...<br /><br />“No one who does good work will ever come to a bad end, either here or in the world to come”<br /><br />People don't live hundred years , What remains is good work like you do.<br /><br />Thanks Again ...sksnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-10610449338062312422014-06-21T13:58:58.066-05:002014-06-21T13:58:58.066-05:00The course of action I recommend is always depende...The course of action I recommend is always dependent on the totality of the taxpayer's facts. <br /><br />Fortunately I have it on good authority that the the Snowbird Trap ("Snowbird Skeet Shoot" is probably a more apropos description) was unintended and will likely be clarified soon. We all hope.Roy Bergnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-51683277121773762692014-06-21T13:16:01.467-05:002014-06-21T13:16:01.467-05:00GlobalCapitalism,
I don't understand your lat...GlobalCapitalism,<br /><br />I don't understand your latin maxim, which I understand means something like "We dare to defend our rights."<br /><br />As the law is now, you have no right not to pay tax. <br />So by intentionally avoiding that obligation, you are not defending your rights. You may be making some form of protest or just cheating on your taxes (which is the goal of most tax protestors, but wrapped in the rhetoric of tax protest). But you are not defending your rights.<br /><br />Jack TownsendJack Townsendhttp://www.tjtaxlaw.com/noreply@blogger.com