Tax Preparation for Streamlined Offshore & Attorney-Client Privilege
Attorney-Client Privilege Tax Return Preparation in Streamlined Cases
Tax Prep for Streamlined Offshore & Attorney-Client Privilege: International Tax Law is extremely hard, and Streamlined offshore disclosure submissions are deceptively difficult. The reason why legal representation is crucial in all phases of the tax submission, is because the IRS tax and legal complexities are hopelessly intertwined with one another.
For example, the legal complexities of PFIC (Passive Foreign Investment Companies), GILTI (Global Intangible Low-Taxed Income), Foreign Trust Reporting and many offshore tax compliance issues cannot be easily parsed out from the tax preparation portion of the submission.
US v Abrahams & Tax Return Preparation Privilege
In Abrahams, the Attorney also handled Tax Preparation for his clients.
The IRS wanted lots of his documents.
“The summons demanded that Abrahams produce “[a]ll documents relating to the preparation to income tax returns for others for [1978 to 1984],” and included a nonexclusive list of six categories of materials.Abrahams’ protestations at a hearing before the district court exposed two ambiguities in the language of the summons.
First, if “relating to” is read very liberally, the summons covers all the material for Abrahams’ Tax and Claims Court litigation, since these cases “relate to” what was claimed on clients’ tax returns.”
The Attorney Claimed Privilege, and the IRS disagreed.
The government claimed that none of it was.”
Court Held Legal Communications could be protected.
“For its part, the IRS argues that the questionnaires information is automatically unprotected because the clients completed the questionnaires in order to allow Abrahams to prop rare their returns.
We cannot fully accept that contention. Although communications made solely for tax return preparation are not privileged, communications made to acquire legal advice about what to claim on tax returns may be privileged.”
5 Risks to Using an Outside CPA in Streamlined Offshore Cases
Here are some of the common issues we find when a Streamlined Offshore Filing has been referred to an outside Tax or CPA Firm.
Most CPAs and Tax Professional do Not Specialize in International Tax
The majority of CPAs and EAs do not specialize in International Tax.
Rather, they handle various different areas of tax.
If your Attorney is referring you to a CPA for these types of matters, be sure they are qualified and interview the CPA as well before engaging the firm and they explain what Kovel is (and isn’t).
Kovel provides no protection for tax return preparation.
The lack of Attorney-Client Privilege
There is no Attorney-Client Privilege with a CPA.
Anything you tell the CPA can be discovered by the IRS.
The Attorney Misrepresented Kovel
Kovel is not statutory law.
It does not cover tax return preparation.
It is limited in scope and can be rejected by the Courts.
The Attorney is not a Board-Certified Tax Specialist with Advanced Tax Credentials
Being Board-Certified is the highest designation a tax lawyer can receive.
Just claiming to be a tax specialist or that an attorney “specializes” is little more than a marketing tool.
Golding & Golding: About Our International Tax Law Firm
Golding & Golding specializes exclusively in international tax, and specifically IRS offshore disclosure.
We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe. Our attorneys have worked with thousands of clients on offshore disclosure matters, including FATCA & FBAR.
Less than 1% of Tax Attorneys Nationwide Are Certified Specialists
Sean M. Golding is one of less than 350 Attorneys (out of more than 200,000 practicing California Attorneys) to earn the Certified Tax Law Specialist credential. The credential is awarded to less than 1% of Attorneys.
Recent Golding & Golding Case Highlights
- We represented a client in an 8-figure disclosure that spanned 7 countries.
- We represented a high-net-worth client to facilitate a complex expatriation with offshore disclosure.
- We represented an overseas family with bringing multiple businesses & personal investments into U.S. tax and offshore compliance.
- We took over a case from a small firm that unsuccessfully submitted multiple clients to IRS Offshore Disclosure.
- We successfully completed several recent disclosures for clients with assets ranging from $50,000 – $7,000,000+.
How to Hire Experienced Offshore Counsel?
Generally, experienced attorneys in this field will have the following credentials/experience:
- Board Certified Tax Law Specialist credential
- Master’s of Tax Law (LL.M.)
- 20-years experience as a practicing attorney
- Extensive litigation, high-stakes audit and trial experience
- Dually Licensed as an EA (Enrolled Agent) or CPA
Interested in Learning More about Golding & Golding?
Golding & Golding specializes in FBAR and FATCA. Contact our firm today for assistance with getting compliant.