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The Tax Non-Compliant American Abroad: What Are Your Choices? Part III



“Quiet” or “Soft” Disclosure

The “quiet” six year approach, while less burdensome, can still be quite expensive. Under this approach, taxpayers basically take the position that they will not go into the offshore voluntary disclosure program and instead, they “quietly” file all the late tax returns paying amounts due and interest; many also file the late FBARs. They hope the IRS will not pull any of their returns for examination. With such a “quiet” disclosure, a taxpayer runs the risk of being audited and faces the potential for criminal prosecution.

Some taxpayers have attempted to follow the IRS guidance from its December 2011 “Fact Sheet” and submitted explanatory letters with their late filings hoping to abate penalties by establishing “reasonable cause”. These kinds of submissions are a midway ground between a true “quiet disclosure” and entry into the full-blown Voluntary Disclosure program. Overall, this approach can take valuable time away from IRS resources because the agency must sift through and process numerous tax returns that yield very little, if any, actual tax revenue.

Part IV will discuss “Streamlined” Procedure

See Part I and Part II

In accordance with Circular 230 Disclosure

Virginia La Torre Jeker J.D., has been a member of the New York Bar since 1984 and is also admitted to practice before the United States Tax Court. She has 30 years of experience specializing in US and international tax planning as well as international commercial transactions. She has been based in Dubai since 2001; prior to that time she worked in Hong Kong for 15 years as a US tax consultant for international law firms, major banks (including HSBC) international accounting firms (Deloitte) and trust companies. Early in her career she worked in New York with the top-tier international law firm, Willkie Farr & Gallagher.

Virginia is regularly asked to speak at numerous conferences and seminars for various institutes and commercial organizations; publishes a vast array of scholarly works in her area of expertise, been interviewed by CNN and is regularly quoted (or has her articles featured) in local and international publications. She was recently appointed to the Professional Tax Advisory Council, American Citizens Abroad, Geneva, Switzerland. She was a guest lecturer at the University of Hong Kong, LL.M Program (Law Department) and served as an adjunct Business Law professor at the American University of Dubai and at the American University of Sharjah where she also taught the legal / ethical aspects of internet law and internet based transactions.

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