IRVINE, Calif., Nov. 24, 2021 /PRNewswire/ -- In today's post 911 world, the value of privacy is at an all-time high. Many U.S. taxpayers simply do not realize how exposed their financials already may be, both to third parties and the federal government. Based on statements made recently by IRS officials, any unwanted financial transparency is likely to increase over time.
Most recently, the Treasury Department has announced revisions to its plan to implement specific reporting requirements against domestic banks and continue with gathering FACTA related information from offshore banks who have U.S. taxpayer clients. These proposals have been strictly scrutinized by the domestic and international banking communities and conservative legislators, but the IRS is making no secret that it plans to use the new measures as soon as they are available. This will undoubtedly, when combined with increased IRS funding, lead to more civil audits and criminal tax prosecutions, which should alarm all taxpayers, not just those at the top of the earning chain.
You may be able to act now to reduce the chances of a costly government audit or criminal tax investigations. The first step in that process is scheduling a consultation with the Law Offices of David W. Klasing. Our dual-licensed Tax Lawyers and CPAs can assess your tax reporting history, no matter how complicated, and help you guarantee a pass on criminal tax prosecution in the right circumstances. Call today at (800) 681-1295 or schedule online today to book a reduced rate initial consultation.
Treasury Department Amends Initial Proposal for Bank Reporting Requirements
The U.S. government is making changes to an original plan that would heighten reporting requirements for U.S. banks. The initial plan, proposed in May of 2021, would require banks with U.S. account holders to disclose the total amount of money moving in and out of an account. These figures would have to be broken down according to whether the transaction involved a foreign entity and whether the same account holder controlled both the source account and the recipient. Any account with more than $600 of transactions would be subject to the reporting requirements proposed in May.
In response to widespread concern about the initial proposal, the Biden administration and the Treasury Department have now made changes to the proposal that would constitute a substantial step down from what was initially proposed in May. In the new proposal, the trigger for IRS reporting would come when more than $10,000 in transfers occur on a single account over the course of one year. The proposed $10,000 threshold would not take into account deposits of salary or wages. Banks would be able to round their reported figures to the nearest $1,000.
Banks are naturally bent on opposing this action. The American Bankers Association (ABA) has indicated that they will oppose any such measure, regardless of the recent changes, so long as the plan implements additional reporting requirements.
How Does the New IRS Reporting Initiative Affect Bank Accounts in the U.S.?
Contained within the proposal are critical details that could impact how banks function going forward if passed. While the proposal does not include any additional taxes or tax increases, these additional measures may impact the way your bank handles your account.
Banks are already responsible for reporting interest income. The form that is used for this purpose, Form 1099-INT, would get a little bit longer. However, the government claims that spending data will not be collected through this form, and that the requirement is limited to the sum of money that flows in and out of the account.
While the administration insists that the measure is intended to target upper-class tax evaders with opaque income streams from sources other than salary, opponents of the measure are wary of its impact on other taxpayers. Legislators on the opposite side of the aisle warn that the new reporting guidelines could be used to catch working class taxpayers on honest mistakes. This would fit the pattern of previous behavior from the IRS, who actually target lower-earning American taxpayers for audits at higher rates than higher-earning individuals.
With the prospect of this proposal becoming law in the future, banks face the difficult task of increasing oversight and generating more complex filings with the government. Satisfying these requirements will cost time and money. It should be expected that these costs will likely be passed on to the account holder. If the new plan is passed, you would be reasonable to expect to see bank fees hike to compensate for the extra legwork.
What Can You Do to Prevent Possible IRS Audits?
If the IRS is granted access to this new data directly from banks, the doors on potential civil, eggshell and reverse eggshell audits and criminal tax investigations will likely swing wide open, leaving tens of thousands of taxpayers exposed in a way they had not been before. If you are concerned about the prospect of a civil audit or criminal tax investigation in light of these new developments in Washington, you may act proactively to protect your net worth and your very liberty.
One way in which you can defend yourself against an audit is through voluntary disclosure. Many U.S. taxpayers avail themselves of the government's voluntary disclosure program every year. Essentially, the IRS is more likely to look favorably upon taxpayers who come forward voluntarily with additional information that modifies inconsistencies in past filings. By incurring this favor, disclosing taxpayers will ordinarily see their possible civil fines reduced and criminal exposure eliminated entirely.
Voluntary disclosure is a delicate process. If the government is already aware of the tax impropriety to be disclosed the disclosure may hurt the taxpayer more than it helps. Never attempt to voluntarily disclose additional financial information to the government without first speaking to one of the dual-licensed Tax Attorneys and CPAs at the Tax Law Offices of David W. Klasing. Whether you are already facing an audit or are concerned about an IRS criminal investigation special agent showing up at your door in the future, we urge you to reach out to us today for help.
Note: As long as a taxpayer that has willfully committed tax crimes (potentially including non-filed foreign information returns coupled with affirmative evasion of U.S. income tax on offshore income) self-reports the tax fraud (including a pattern of non-filed returns) through a domestic or offshore voluntary disclosure before the IRS has started an audit or criminal tax investigation / prosecution, the taxpayer can ordinarily be successfully brought back into tax compliance and receive a nearly guaranteed pass on criminal tax prosecution and simultaneously often receive a break on the civil penalties that would otherwise apply.
It is imperative that you hire an experienced and reputable criminal tax defense attorney to take you through the voluntary disclosure process. Only an Attorney has the Attorney Client Privilege and Work Product Privileges that will prevent the very professional that you hire from being potentially being forced to become a witness against you, especially where they prepared the returns that need to be amended, in a subsequent criminal tax audit, investigation or prosecution.
Moreover, only an Attorney can enter you into a voluntary disclosure without engaging in the unauthorized practice of law (a crime in itself). Only an Attorney trained in Criminal Tax Defense fully understands the risks and rewards involved in voluntary disclosures and how to protect you if you do not qualify for a voluntary disclosure.
As uniquely qualified and extensively experienced Criminal Tax Defense Tax Attorneys, Kovel CPAs and EAs, our firm provides a one stop shop to efficiently achieve the optimal and predictable results that simultaneously protect your liberty and your net worth. See our Testimonials to see what our clients have to say about us!
Want to Learn More About the Impact of IRS Access to Your Bank Account? Call Us Today
If you have failed to file a tax return for one or more years or have taken a position on a tax return that could not be supported upon an IRS or state tax authority audit, eggshell audit, reverse eggshell audit, or criminal tax investigation, it is in your best interest to contact an experienced tax defense attorney to determine your best route back into federal or state tax compliance without facing criminal prosecution.
At the Tax Law Offices of David W. Klasing, our dual-certified tax lawyers and CPAs stay current on developments in tax legislation so that our clients remain protected. Call our offices at (800) 681-1295 to schedule your reduced rate initial consultation.
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