Since the 2011 Offshore Voluntary Disclosure Initiative was first announced, and as it has evolved into the full-fledged 2012 Offshore Voluntary Disclosure Program (OVDP) and eventually into the current 2014 OVDP complete with the Streamlined Procedures , I have been fairly consistent in recommending two things for those with undisclosed offshore accounts and foreign income:
- Use the best offshore program available to "come clean" with the IRS.
- DO NOT make a so-called "soft" or "quiet" disclosure attempting to avoid the offshore penalties some are subject to when submitting and complying with an Offshore Disclosure (sometimes known as FBAR Amnesty).
Even when the issue has turned a spotlight to self-proclaimed "minnows" — that is those with relatively small amounts to declare — my position has not changed; I still recommend the OVDP (opt-out or not) or Streamlined Process, if appropriate.
For this, I have been called an "ambulance chaser," a "scaremonger," a "fraud," the list goes on. The reasons for this criticism? Many IRS "experts" assure me that the IRS is only interested in catching "whales" — the large tax evaders with immense potential for recovery — not the everyday minnows with five-to-six figures in offshore accounts.
In my critics' defense, their reasoning is rather logical, but that's also the reason why it's dead wrong. Time and time again, the IRS has made it painfully clear that they are not ruled by normal logic and reason. While there is certainly a sense of logic to the IRS and their operations, in order to understand it, you have to stop thinking as an individual and start thinking as an entity solely focused on money; then, and only then, will their twisted logic start to make sense.
An actual IRS employee propaganda poster? Analysis: Probably
Yet, while the character of the IRS is certainly a subject expansive enough to fill a few other articles, I'm not particularly interested in going down that bottomless rabbit hole. What I am interested in is disproving the belief that the IRS is only interested in "whales" when it comes to offshore compliance. In support of my argument, I offer our recent podcast, which takes a detailed look at the US-born King of Thailand — who we suspect is still a US person with a net worth exceeding $30 Billion USD — his likely non-compliance, and our suspicion that he has absolutely zero IRS Offshore concerns.
Even if our assumptions are incorrect, which would mean that the King of Thailand has properly expatriated or is in US tax compliance, rest assured that there are other "whales" around the world whom the IRS has no interest in prosecuting because of potential political fallout (we're looking at you, Middle East).
If only we could all be the king.
Watch here:
If you have a tax issue you're concerned about, contact us. We can help.
