There is no time limit on your ability to make a voluntary disclosure of your offshore accounts. But you could become ineligible to make a disclosure at any time if the IRS begins examining your return or initiates a criminal investigation.
General Disclosure Period
The disclosure period for the Streamlined Filing Compliance Procedures or the New Offshore Voluntary Disclosure Program is generally six years. However, you can make a disclosure at any time, even if you have less than six years of FBAR noncompliance to report
One big risk of waiting to make an offshore disclosure is that the IRS examines your tax return. You will become automatically ineligible to make an offshore disclosure.
This is true even if the IRS examination has nothing to do with offshore accounts. The examination doesn’t have to be for a tax year that you should have reported foreign accounts.
Because of this risk, you should learn more about your offshore disclosure options as soon as possible. There isn’t any benefit to waiting, so talk to a tax attorney right away.
Offshore Disclosure Options
You can generally use one of three offshore disclosure options:
- Quiet disclosure
- Streamlined Procedures
- New Offshore Disclosure Program
The best option for you will depend on many factors. Some taxpayers have properly reported their foreign income, but simply forgot to file an FBAR or other information return. Others have hundreds of thousands in unreported foreign accounts across several years and a significant amount of undisclosed foreign income from these accounts.
The costs and benefits of each disclosure method need to be evaluated based on your circumstances. You don’t want to pay more than necessary in tax penalties, but you don’t want to expose yourself to further penalties if the IRS later decides to examine your return.
You also need to get a professional opinion on the issue of willfulness. If the IRS considers your actions to be willful, then you could potentially be criminally prosecuted. In these cases, the Offshore Disclosure Program is the only disclosure method that will protect you from criminal liability if used properly.
Contact a tax attorney to discuss your offshore disclosure case and get a better understanding of your options.
The Gartzman Law Firm handles offshore disclosure and other tax resolution cases. Use our contact form to request a consultation with an Atlanta tax resolution attorney.