The indictment in a recent case alleged that the defendant had an interest and authority over at least 20 foreign financial accounts in multiple countries and was accused of using the IRS-optimized offshore domestic procedures to further forward a false filing rather than fully disclosing all reportable offshore earnings related to its previously undisclosed foreign financial accounts.
These allegations are a rare moment the IRS has shown it will prosecute taxpayers who use the Optimized Voluntary Disclosure Program to defraud the administration. Because of this, a taxpayer may be the target of a criminal investigation into reporting tax and overseas information rather than receiving a break in mandatory penalties for non-intentional FBAR violations and other favorable program terms.
The Optimized Disclosure Program is aimed exclusively at taxpayers who willfully not commit offshore FBARs and have committed unreported foreign income violations. To show that an FBAR crime was unintentional, the taxpayer must provide written evidence that the breach was caused by negligence, error, or some other good faith cause.
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Dave Klasing Esq.
MS-Tax CPA
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SOURCE Tax Law Offices of David W. Klasing, PC
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