Streamlined Domestic Offshore Procedures | International Tax Lawyer & Attorney Austin Texas
Hello and welcome to Sherayzen Law Office Video blog. My name is Eugene Sherayzen and I’m an international tax attorney and owner of Sherayzen Law Office, Ltd.
Today, I’m continuing my series of blogs from Austin, Texas. I am standing in front of the IRS Campus here in Austin, Texas that processes voluntary disclosures, in particular, Streamlined Disclosures: Streamlined Domestic Offshore Procedures and Streamlined Foreign Offshore Procedures.
What I would like to do in this blog is discuss Streamlined Domestic Offshore Procedures. What is it and why it is important. First of all Streamlined Domestic Offshore Procedures is an Offshore Voluntary Disclosure option. In the previous video, I discussed what an Offshore Voluntary Disclosure is. Briefly, let’s restate that an Offshore Voluntary Disclosure is basically an option that the IRS provided to US Taxpayers; I should say several options, that the IRS provided to US Taxpayers in order to come forward and resolve their prior non-compliance with US International Tax Laws in exchange for a more lenient treatment: a lower penalty, immunity from criminal prosecution, etc.
Where does Streamlined Domestic Offshore Procedures fit into this picture? Streamlined Domestic Offshore Procedures or SDOP is reserved for non-willful taxpayers. People who, for example, did not know about the fact that FBAR existed or that they didn’t know they needed to report their foreign income or there was something that happened that prevented them from learning about it or they were just negligent; not reckless, but just negligent in their compliance. That is they did not consult an attorney in time or there was something else or a another circumstance in their life that prevented them from complying with US International Tax Laws. For these taxpayers who are non-willful, the IRS gave this option and it’s a valuable option; it’s a good option.
In fact, as far as the voluntary disclosure options go, Streamlined Domestic Offshore Procedures is one of the best options available. The penalty is relatively low; it is 5% of the assets that should have been reported on FBAR or any other International Information return, a one-time 5% penalty on the highest of the past six years. There are no penalties for income tax non-compliance; you just have to pay taxes and interest on the tax but there are limitations to this option.
First of all you cannot file a late return pursuant to Streamlined Domestic Offshore Procedures; you can only amend an already filed return. It can be a problem; especially for taxpayers, who for one reason or another couldn’t file all of their US tax returns on time. Second, you have to certify under the penalty of perjury, that you were in fact, non-willful. This subject is very sensitive and very important. Here, you must really talk to an attorney to figure out: are you non-willful according to the US legal standards or are you willful with respect to your noncompliance? There are a lot of facts and circumstances that go into that determination. You really need to talk to an attorney; I cannot stress this enough before you strive to do a voluntary disclosure. The IRS has expressly stated that they will go after the cases where they think people are abusing Streamlined Domestic Offshore Procedures because in reality they were not non-willful but they were willful.
If you would like to know more about Streamlined Domestic Offshore Procedures, you can call me at (952) 500-8159 or you can email me at [email protected]
Thank you for watching, until the next time.