News from the 2014 Criminal Fraud and Tax Controversy Conference

We just returned last week from attending the Criminal Fraud and Tax Controversy Conference in Las Vegas, sponsored by the American Bar Association Section of Taxation where many government officials were in attendance. Below are some interesting observations:

On the new IRS Streamlined program (including the SDOP and SFOP programs), David Horton LB&I director for international compliance (who is in charge of the IRS Streamlined program), said that there are differences between the OVDP and Streamlined, particularly noting to Streamlined “requires a certification of non-willfulness, and a false certification could lead to possible criminal liability.”

Horton also indicated that he has a team in Austin, Texas for the IRS Streamlined program that is reviewing EVERY certification of non-willfulness. This seems contradictory to the IRS’ statement that not every Streamlined submission will be audited (perhaps the returns will not be audited but the certifications of non-willfulness will be carefully scrutinized.

On the certification statement of reasons for noncompliance, Horton said that a “conclusory statement” will not suffice and that there is not a “checklist on willfulness.”  There was intentionally no statement on what a proper certification statement should include.

“He [Horton] warned of ‘a lot more John Doe summonses’ in the next 12 to 24 months, in other parts of the world and ‘beyond banks.’ The focus will be on intermediaries, he said, referring to those who promoted or facilitated transactions for stashing money abroad.”
Horton indicated that the IRS was aware of but did not have a current solution for the difficulty and delay of U.S. citizens abroad most of their lives not have as SSN and unable to get one in a decent time period, thus delaying their OVDP or Streamlined.

Horton also indicated that revised new FAQs for the Streamline program should be expected shortly.

In our experience, good facts applied to the law will result in a result.  Legal research, careful drafting and legal advocacy of a taxpayer’s particular circumstances are still strongly recommended for a favorable result.