If you have unreported foreign accounts, you are not alone. Every year, I speak with hundreds of clients with tax non-reporting issues (e.g., FBARs, Form 8938, Form 3520, Form 3520-A, etc.). The good news: the IRS offers various programs for these taxpayers to regain compliance and sometimes mitigate criminal exposure. These programs include, for example, the IRS Streamlined Filing Compliance Procedures or the IRS’s Voluntary Disclosure Program.
In many instances, the failure to report foreign accounts can be a delicate and complex matter, causing unnecessary anxiety and stress for taxpayers. Accordingly, taxpayers often need to trust their tax professional (a tax attorney) to guide them through the process. This article provides some guidance to taxpayers when selecting the right tax attorney and tax law firm to help with either the IRS Streamlined Compliance Procedures or the IRS’s Voluntary Disclosure Program.
State Bar Record
Because every state jurisdiction provides licensures for tax attorneys to practice, it is important as an initial matter for taxpayers to check the tax attorney’s state bar record. Indeed, many state bars provide as public record details regarding any disciplinary action taken against the attorney. Ranking from “best” to worst, the severity of disciplinary action ranges from: (1) censure; (2) probation; (3) suspension; and (4) expulsion. Because expelled attorneys cannot practice law by definition, any acts of suspension and/or inactivity in licensure should be immediate red flags, regardless of the reason for suspension.
Therefore, the very first action a taxpayer should take in selecting a tax attorney is to check the attorney’s state bar record. Again, these records are extremely easy to find on the internet and should be the first action prior to signing a binding engagement letter with the attorney.
Federal Tax Credentials
Although not gospel, credentials can matter—particularly for complex and sensitive international tax matters such as undisclosed foreign accounts. As a very general matter, you will want to seek out a tax attorney and law firm with well-credentialed tax attorneys.
Credentials you should look for include whether: (1) the attorney is dual-credentialed as an attorney and CPA, (2) the attorney has any federal clerkship experience (particularly in federal tax), (3) the attorney has any federal government experience, such as significant roles with IRS counsel or DOJ tax; and (4) the attorney graduated from a top LL.M. Tax program, such as New York University, Georgetown, or the University of Florida (the top three ranked LL.M. programs for more than a decade).
Federal Court Experience
In most international tax cases, taxpayers will not need to resort to federal court. However, it can be helpful to have a tax attorney and law firm with experience in federal court litigation matters to provide guidance. For example, if the case proceeds to trial, does the tax attorney have sufficient experience to continue the case, or will the tax attorney be forced to abandon it in favor of another tax attorney? Does the tax attorney have sufficient federal court experience to recognize potentially hidden dangers in making disclosures to the IRS under the IRS Streamlined Filing Compliance Procedures or the IRS Voluntary Disclosure Program? When discussing these matters with a tax attorney and their law firm, it can be helpful to request specific federal court experience including publicly-filed case names, their subject-matter, and their ultimate dispositions.
Although choosing the right tax attorney and law firm can seem like a daunting task, it does not have to be that way. In addition to standard questions such as costs, taxpayers should feel free to ask the potential tax attorney other questions in the initial consultation. These questions should include, at a minimum, the tax attorney’s state bar record, credentials in tax, and federal court experience so that the taxpayer can make an informed decision regarding the representation moving forward.
Need help with tax issues? Contact us as soon as possible to discuss your rights and the ways we can assist in your defense. We handle all types of cases, including complex international & offshore tax compliance. Schedule a consultation or call (214) 984-3000 to discuss your international tax concerns or questions.