International Tax Attorney

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foreign tax audits and preparation san diego tax lawyer

Foreign Tax Audits

The IRS is currently auditing and prosecuting holders of offshore credit cards, offshore bank accounts, foreign trusts, and international business companies for tax evasion and failure to report transfers. 

Generally a U.S. taxpayer opens a foreign bank account, or creates a foreign trust and International Business Corporation, which in turn opens the foreign bank account.  Funds are deposited into that interest bearing account, sometimes prior to paying tax on those funds.  The funds are later withdrawn using an American Express, MasterCard or Visa credit card setup by that foreign bank so the taxpayer can spend the money.

The IRS has recently summoned American Express, MasterCard and Visa and has received a list of over one million U.S. taxpayers who have a foreign credit card.  The IRS is currently sending out audit letters requesting further documentation and threatening civil penalties of 100% of the account balance or at least $100,000, or criminal sanctions of up to 5 years in the federal penitentiary, and loss of any business or professional license.  These sanctions apply to tax evasion as well as to simply failing to report the foreign transaction to the IRS.

There are an unlimited number of legitimate defenses that are very effective to combat the government's egregious penalties and crimes, each dependent upon each taxpayer's own facts and circumstances.  Each case will be thoroughly analyzed and completely developed to bring out all defenses to prevail before the IRS.  We can reduce or eliminate taxes, penalties or interest as a result of improper us of your foreign bank accounts, offshore credit cards, foreign trusts and international business corporations.

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Offshore Tax Audits – Appeal and Litigation

The IRS is currently auditing and prosecuting holders of offshore credit cards, offshore bank accounts, foreign trusts, and international business companies for tax evasion and failure to report transfers.  At TaxLawFirm.net, we can help reduce or eliminate IRS debts associated with audit services international; such as offshore credit cards, foreign trusts, offshore bank accounts, and international business companies. 

Careful audit planning and a full analysis of the problem areas are necessary to prevail against the IRS during audit international.  Prevent an IRS foreign credit card audit from turning into a full criminal tax investigation.  Don't wait until the last minute.

Audit International concerns usually arise due to the following typical situation. Generally a U.S. taxpayer opens a foreign bank account, or creates a foreign trust and International Business Corporation, which in turn opens the foreign bank account.  Funds are deposited into that interest bearing account, sometimes prior to paying tax on those funds.  The funds are later withdrawn using an American Express, MasterCard or Visa credit card setup by that foreign bank so the taxpayer can spend the money.

Audit International Penalties Can Be Severe

The IRS has recently summoned American Express, MasterCard and Visa and has received a list of over one million U.S. taxpayers who have a foreign credit card.  The IRS is currently sending out audit international letters requesting further documentation and threatening civil penalties of 100% of the account balance or at least $100,000, or criminal sanctions of up to 5 years in the federal penitentiary, and loss of any business or professional license.  These sanctions apply to tax evasion as well as to simply failing to report the foreign transaction to the IRS.

Legal Defenses for Offshore Audits

There are an unlimited number of legitimate defenses for an audit international that are very effective to combat the government's egregious penalties and crimes, each dependent upon each taxpayer's own facts and circumstances.  Each case will be thoroughly analyzed and completely developed to bring out all defenses to prevail before the IRS.  Our experience in audit services international will help you reduce or eliminate taxes, penalties or interest associated with your foreign bank accounts, offshore credit cards, foreign trusts and international business corporations.

The IRS takes these matters extremely seriously. So, if you are currently going through a tax audit of your international concerns or know of one upcoming, the earlier you can get an experienced professional on your side the better.

The tax attorneys at TaxLawFirm.net are specialists in tax disputes with the IRS and state governmental tax agencies.  A free initial telephone call to us should answer your most compelling questions about overseas audits.  This no obligation telephone call is strictly confidential and protected by the attorney – client privilege and will never be disclosed.  We look forward to hearing from you and discussing your tax situation

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Significantly Reduce Your Tax, Penalties and Interest During Foreign Tax Audits

An aggressive stance with the IRS and a complete understanding of the foreign Controlled Foreign Corporation, Passive Foreign Investment Company and Foreign Personal Holding Company rules are necessary to win an audit and substantially reduce any taxes owed.  Careful audit planning and a full understanding of the problem areas are necessary to prevail against the IRS during an offshore tax audit. 

The Controlled Foreign Corporation, Passive Foreign Investment Company and Foreign Personal Holding Company rules are complex and are written by congress to assist the IRS.  A thorough understanding of the loopholes and the intricacies of these tax laws are necessary to prevail.  The Controlled Foreign Corporation rules tax the U.S. citizen or resident on their share of International Business Corporations income, regardless of whether the income was distributed, if the U.S. citizen or resident has a beneficial ownership interest in the IBC, even if through a Foreign Trust.  Numerous exceptions apply to prevent assessment of taxes by the IRS.  The Passive Foreign Investment Company and Foreign Personal Holding Company rules tax a U.S. person on foreign income from passive investments such as interest, dividends, rents, royalties and capital gains.  By not knowing the technical international tax rules, any document you provide or statement you make to the IRS may be an admission that you have violated these rules and owe the tax. IRS auditors are experts at interpreting the offshore tax rules and regulations against the taxpayer to increase your tax liability.  They are equally clever in making it sound like you have no alternative but to accept their version of the facts and law. 

This tax law firm takes an aggressive approach against the IRS by pursuing all legal defenses, claiming all deductions and reducing taxable income.  If you use this tax law firm, your total tax, penalties, interest and attorney's fees will be substantially less than if you represent yourself and the IRS auditors determine your tax liability.  As trained advocates, we have successfully represented hundreds of individuals, corporations, partnerships, LLC's, trust and estates in audits, appeals and tax litigation.  Fighting the IRS by yourself is time consuming, emotionally draining and will leave you owing more taxes than if you hired a competent professional to defend you. 

There are several other techniques we employ to reduce or eliminate your tax debt: 

  • Negotiate any tax debt down to a reasonable amount under the Offer in Compromise program.
  • Discharge your tax debt in bankruptcy. Taxes may be eliminated if you follow the bankruptcy and tax rules, timing of the petition, and tax lien removal;
  • Prevent collections based on the Statute of Limitations;
  • Negotiate a low Installment Agreement;
  • Obtain a Currently Not Collectable status;
  • Prevent levy and liens from attaching your assets ; and
  • The innocent spouse defense.

We make every reasonable effort to keep the attorney's fees as low as reasonably possible by having you to perform certain tasks and by having the lowest paid competent individual perform the necessary legal work.  The offshore industry is a relatively small community.  Word gets around quickly as to the competency of professionals and their cost.  Most of our clients are referrals from business and international Attorneys, Certified Public Accountants, Enrolled Agents and bookkeepers.  We believe it is more profitable in the long run to do an excellent job at a reasonable fee and to get additional referrals.

Prevent Criminal Charges In Foreign Tax Audits

There are numerous ways to prevent an IRS foreign tax audit from turning into a criminal tax investigation.  Ample planning and preparation during the audit process can prevent the IRS from even commencing a criminal tax investigation.  An appropriate tax strategy early in the process will protect your reputation in the community and your profession license or career.

Setting up an International Business Corporation or Foreign Trust is not illegal.  However, failing to disclose certain transactions, or using before tax funds may be tax evasion.  If not done absolutely correct, the IRS may decide to prosecute a tax crime.  The sentence for tax evasion includes incarceration in a federal penitentiary for up to 5 years, fines up to $500,000 and restitution of the tax loss, plus the 75% civil fraud penalty and interest. 

Any incarceration in a federal penitentiary is emotionally devastating, harmful to your career or profession, and significantly affects family life.  Careful manipulation of the Federal Sentencing Guidelines and court rules are imperative to competently defend a tax evasion case.  This planning is necessary to reduce a sentence to a halfway house or merely probation.

If you take an aggressive stance early enough in an “eggshell audit” careful planning and preparation may prevent detection all together.  A thorough understanding of the potential problem areas allow us to filter through all available documents and evidence to determine which documents to voluntarily provide to the government.  Ways to prevent a common IRS tax audit from turning into a criminal tax investigation include not volunteering incriminating documents, not making admissions to IRS-Criminal Investigation Division, and treating the case as a common civil tax audit with the IRS Revenue Agent with well prepared common sense explanations to every event.

It is imperative that you not discuss this case with the IRS.  During the interview they will elicit statements to be used against you and ignore any information that will help your side.  They are your adversary.  Even though you believe you will be helping yourself, you will actually be making matters worse by giving them additional evidence to use against you.  They have the burden of proof, not you. 

The advantage of hiring an experienced criminal tax attorney early in the process is to possibly prevent discovery of the act, prevent further harm and advocate your legal rights to the greatest extent possible.  Since you are protected by the attorney-client privilege, everything remains strictly confidential.  All actions will be undertaken to protect your professional license, your reputation in the community, and prevent the embarrassment of your family, friends and business associates from discovering this problem.  Although expensive, the cost of hiring a competent experienced criminal tax attorney pales in comparison to a criminal conviction on your record and repayment of the tax, 75% civil fraud penalty, interest and court fines. 

We have successfully represented criminal defendants in all aspects of a tax evasion case including aggressively negotiating a reduced plea bargain, and have appeared in court and at trial to defend criminal tax cases.  We have significantly reduced potential criminal sentences before Magistrates and Federal Judges at Federal Sentencing Hearings.  We will pursue all legal and ethical tax angles and aggressively defend your case as well. 

Consequences of Leaving the the U.S.

Expatriating and renouncing your US citizenship can only be accomplished before the threat of an IRS audit letter, not afterwards or during a tax crime investigation.  Leaving the country to avoid an IRS tax audit is a severe over-reaction to a resolvable problem.

The thought of not dealing with this problem, leaving the U.S. and living abroad the rest of your life has crossed many people's mind.  Spending your days on the beach in an offshore location sounds enticing.  However, the act of fleeing the country after a tax audit notice is sufficient proof to turn a simple civil tax audit into a criminal tax matter.  The statute of limitations for assessment is extended during your absence.  Every time you enter the country to see any U.S. friends or relatives, you will be fearing the worst from Immigration & Naturalization Service.  The IRS has complex methods to locate citizens living abroad.

The legal act of expatriating and renouncing your U.S. citizenship cannot be accomplished if you are fleeing the country because you owe taxes, or are under investigation by IRS-Criminal Investigation Division for potential tax crimes.  Eventually, you may feel the urge to return home and come clean – but at that time it will be at a far greater cost.  Leaving the U.S. is too severe a lifestyle change just to run away from a tax audit .

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William D. Hartsock is an aggressive tax attorney whose practice is limited to tax disputes with the IRS and state governmental tax agencies.  A free initial telephone call to him should answer your most compelling questions.  This no obligation telephone call is strictly confidential and protected by the attorney – client privilege and will never be disclosed.  We look forward to hearing from you and discussing your tax situation.

Please call (858) 481-4844 to discuss your case with William D. Hartsock, an experienced Tax Attorney.  This is a free initial consultation and is protected by the attorney-client privilege.

The IRS is currently auditing and prosecuting holders of offshore credit cards, offshore bank accounts, foreign trusts, and international business companies for tax evasion and failure to report transfers. There are an unlimited number of legitimate defenses that are very effective to combat the government's egregious penalties and crimes, each dependent upon each taxpayer's own facts and circumstances.