I’ve talked to a number of people who are interested in hiring our firm to assist them with the FBAR amnesty or disclosing foreign bank accounts to the IRS. They figure that they have until September 23, 2009 to get moving, so what’s the rush.
The IRS Is Looking For Your Swiss Accounts
Here’s the rush. In order to qualify for the amnesty you have to get to the IRS before they get to you. A voluntary disclosure has to be timely. Timely means you file your amnesty application BEFORE they find out about you. And you don’t know whether they have found information about you, because if they’ve opened a file on you there is no way for you to know this.
Here’s the Internal Revenue Manual’s rules on what it takes for you to beat the IRS to the “start” line:
A disclosure is timely if it is received before:
A. The IRS has initiated a civil examination or criminal investigation of the taxpayer, or has notified the taxpayer that it intends to commence such an examination or investigation.
B. The IRS has received information from a third party (e.g., informant, other government agency, or the media) alerting the IRS to the specific taxpayer’s noncompliance.
C. The IRS has initiated a civil examination or criminal investigation which is directly related to the specific liability of the taxpayer.
D. The IRS has acquired information directly related to the specific liability of the taxpayer from a criminal enforcement action (e.g., search warrant, grand jury subpoena).
You don’t know whether the IRS knows about your specific situation or not. But each day that passes is another day that they might find out. And one of the ways they find out is by other people applying for the amnesty. When you apply for the amnesty you will be asked a lot of questions, and you will be asked to name bankers and other people. These answers create new leads for the IRS Criminal Investigation agents to follow.
Moral of the story. Yes, you can wait until September 22 to apply for the amnesty if you want. But a lot of events out of your control might happen between then and now. And those events could disqualify you from the amnesty. Don’t procrastinate. Call me at 626-689-0060. Doing nothing now is a very bad idea.
-Phil
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