Streamline Certification Advice

Explore:  FATCA FBAR Income Taxes OVDP

Effective July 1, 2014 new Streamline Procedures for voluntary disclosures may provide some taxpayers the opportunity to pay a substantially reduced or no penalty FBAR penalty depending upon whether they are domestic or non-resident taxpayers. See

The announcement of the Streamline changes came in the form of changes to the Offshore Voluntary Disclosure Program (2014). This method of announcing policy has been criticized by the National Taxpayer Advocate as it has no binding effect on the IRS in litigation. But, that is not the only troublesome component of the announcement. The certification procedure lacks criminal prosecution protections unlike the OVDP. The analysis of a taxpayer’s prosecution risk need to be taken very seriously and should be made by lawyers rather than other tax professionals who are simply looking at the penalty differences.

Among the risks of not using a lawyer is the absence of the attorney- client privilege. This means that the non-lawyer can be called upon to testify against the taxpayer and be required to produce records and communications with the taxpayer, including research memorandum and forecasts.

Lawyers have the ability to hire accounting professionals to provide assistance in rendering advice to client ( the Kovel privilege). Work done in support of the lawyer is privileged. The tax professional cannot then be called to testify against the client.

Taxpayers who rely on their current tax professional to submit a Streamline Certification do so at potentially great risk including the risk of prosecution and multiple year 50% FBAR penalties. IT IS FAR WISER, GIVEN THE STAKES, TO HIRE COUNSEL SKILLED IN THE AREA WHO IS FULLY INFORMED OF THE FACTS TO MAKE THE RECOMMENDATION ON THE USE OF THE STREAMLINE PROCEDURE.


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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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Sanford Millar
Law Offices of Sanford I. Millar

Experience and Qualifications: Over 30 years of experience in domestic and international tax... View Profile »

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