Quiet disclosure is never in your best interest. Under U.S. tax laws, it is illegal and can open you up to serious fines, penalties, and criminal charges. Rather than sneak in an amended tax return, you should consult with an experienced international tax attorney who might help you rectify your situation and minimize your penalties and interest.
What Is a Quiet Disclosure?
Suppose you finally get around to reading all of those documents your financial advisor or offshore bank sent you– and you suddenly realize that you’ve violated U.S. tax law by failing to disclose your offshore accounts, assets, and income. Rather than consult with a lawyer, you quickly file an amended tax return, “quietly disclosing” your violations. You do not submit anything under the Streamlined Disclosure Procedures or assert reasonable cause. This is a quiet disclosure.
By Illegally Amending Your Tax Return, You Become an Audit Risk
Suppose your offshore bank realizes that you should have been filing FBAR and FATCA forms and reports your violations to the IRS. Or the IRS decides to do a routine audit on your account. As they sift through your filings, assessing each deduction, tax credit, and your reported income, the IRS agent notices your amended return. They also realize that you never filed the appropriate paperwork establishing reasonable cause for your non-compliance or seeking recourse under the Streamlined Disclosure Procedures. Now you’re really in trouble.
Your amending tax return audit risk is just too high. When you make a quiet disclosure, you might face criminal charges for tax evasion or fraud, significant financial penalties, and interest. The IRS can seize your property, assert liens, and take your Social Security benefits It might even put a stay on your U.S. passport, preventing you from leaving the country (especially if it considers you a flight risk). A federal tax evasion or fraud conviction can also result in a five-year prison sentence and a permanent criminal record.
Don’t Delay If You Want to Use the Offshore Voluntary Disclosure Program
By making a quiet disclosure, you turned your honest mistakes into a willful violation of U.S. tax laws. This means that you’ll have to either act very quickly and file under the soon-to-expire Offshore Voluntary Disclosure Program (OVDP) or pay significant fines and interest.
If you’re interested in OVDP, you must act very quickly. The program is wrapping up and will end on September 28, 2018. Currently, it is the only IRS program that allows people willful non-disclosures of offshore assets to pay a reduced penalty. For more information about OVDP, contact Randall & Associates immediately. We can assess your eligibility for the program and can also identify other legal options that might bring you into compliance.
Can I Fix a Quiet Disclosure?
Sometimes, an experienced international tax lawyer can help you remedy a quiet disclosure, especially if you act before the IRS discovers your violations. However, your best option is to avoid a quiet disclosure altogether. If you discover that you accidentally violated the IRS’ offshore disclosure requirements, consult with an experienced international law attorney immediately.
A lawyer can help bring back into full compliance with the IRS’ disclosure rules. This might involve filing under the Streamlined Offshore Domestic Procedures, the Streamlined Offshore Foreign Procedures, asserting reasonable cause, or quickly filing under the OVDP.
If you’re facing criminal charges, an international tax lawyer can help you understand your tax obligations and might help you find a skilled defense lawyer that can help fight for your freedom.
What Should I Do Instead of a Quiet Disclosure?
If your violations were non-willful, you have several legal options. They include:
- Streamlined Offshore Procedures: a series of procedures that let you correct your non-willful offshore disclosure violations and pay reduced penalties
- Reasonable Cause: a legal defense in many non-disclosure cases that might waive your penalties and interest
Because these programs require a careful analysis and detailed disclosures, you should consult with an international tax lawyer before applying for them. For example, if your non-disclosures were willful, filing under the Streamlined Offshore Procedures might do more harm than good.
At Randall & Associates, we’ll help you fully understand your options. Contact us today to schedule a confidential evaluation of your case and situation.
Why Do Some Financial Professionals Recommend Quiet Disclosures?
If you search online, you might find articles claiming that you can strategically use quiet disclosure. They argue that quiet disclosure sometimes isn’t that bad. At Randall & Associates, we strongly disagree with these arguments. It’s incredibly risky to quietly disclose your violations to the IRS and amending your tax return can increase your audit risk.
Unfortunately, there are lawyers, CPAs, and financial advisors who either don’t understand the implications of a quiet disclosure or are unscrupulous. Just because a lawyer has a tax practice doesn’t mean they understand all of the nuances of offshore disclosures, international tax law, and the IRS’ disclosure programs.
Before you retain a tax lawyer, ask them about their credentials. For example:
- Does the lawyer have specialized training in international tax law?
- Have they handled complex international tax law matters before?
- Can they clearly explain the differences between the Streamlined Disclosure Procedures, OVDP, and reasonable cause?
- Do they understand the potential risk of a quiet disclosure? Why are they willing to put your freedom and reputation in danger?
Never hire an international tax lawyer who can’t adequately answer these questions. Instead, contact the experienced team at Randall & Associates.
Contact an International Tax Attorney to Learn More About Quiet Disclosure
If you’re concerned about your non-disclosure of offshore accounts, assets, and income to the IRS, don’t panic. You might have options that can help reduce or eliminate the IRS’ penalties and interest. At Randall & Associates, we are skilled international tax professionals that guide our clients through the difficult IRS issues. We may be able help you avoid both the stress and penalties associated with a quiet disclosure.
To request a confidential, no-risk consultation, simply contact our office. We will listen to your concerns, assess your liability, and help you build a plan to remedy your violations. Just like you, we value honesty and efficiency. Our team will provide you with practical advice and treat you with the respect you deserve.