Awards & Recognition
In the thriving, vibrant setting of San Jose, adherence to federal and California state tax laws is as essential as in any other part of the United States. Just as the city is celebrated for its innovative spirit and tech-driven economy, it is equally recognized for its strict compliance with the intricate network of complex federal and California tax regulations that oversee domestic and offshore financial activities. The Internal Revenue Service (IRS) requires every taxpayer in Silicon Valley to diligently comply with federal tax laws. Similarly, the State of California’s Franchise Tax Board (FTB) and the California Department of Tax and Fee Administration (CDTFA) provide methods for non-compliant taxpayers in San Jose to regain compliant status by coming forward with the details of their failure to comply with the California state tax code.
For those who have intentionally failed to report taxable domestic or offshore income or failed to fulfill the required foreign information reporting, considering programs such as the delinquent foreign information reporting program, domestic or ex-pat streamlined voluntary disclosure program, or the government’s comprehensive offshore voluntary disclosure program might be a wise move. These programs are designed to minimize civil penalties and prevent criminal tax prosecution. However, engaging in these or any other penalty reduction strategies should never be done without thorough evaluation and guidance from an experienced dual-licensed Voluntary Disclosure Tax Attorney & CPA.
Our San Jose, CA Voluntary Disclosure Attorneys & CPAs navigate the complexities of various federal and California state voluntary disclosures, including domestic, offshore, CDTFA (BOE), and FTB voluntary disclosures, streamlined procedures, and delinquent FBAR and international information return submission procedures. If you have financial accounts abroad, we will ensure you correctly report the offshore assets, investments, trusts, and businesses, helping you avoid costly tax penalties and exposure to potential criminal tax and foreign information reporting.
As long as a taxpayer who has willfully committed tax avoidance (potentially including non-filed foreign information returns coupled with affirmative evasion of U.S. income tax on offshore income) self-reports the federal or California state tax non-compliance through a domestic or offshore voluntary disclosure before the IRS or the California state agency 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.
What is the IRS’s Voluntary Disclosure Practice?
The IRS Criminal Investigation Division (CI) traditionally offers the Voluntary Disclosure Practice. CI considers timely, accurate, and complete voluntary disclosures when determining whether to recommend prosecution for criminal tax violations. Strict Compliance with the VDP’s program’s terms nearly guarantees a pass on criminal tax charges. To voluntarily disclose to CI, the disclosure must be truthful, timely, and comprehensive. Additionally, you are required to:
- Make suitable good faith arrangements with the IRS to pay the owed taxes, interest, and any applicable penalties; If you have the funds available you pay 100% of what is owed. If you don’t, you submit a collection information statement with your voluntary disclosure for the portion you do not have.
- Work with the IRS to ascertain your accurate tax liability.
When is a Voluntary Disclosure Considered Timely?
- It’s made before:
- The IRS has started a civil examination or criminal investigation of the taxpayer or has notified the taxpayer that it intends to commence such an examination or investigation;
- The IRS receives information from a third party (e.g., an informant, another governmental agency, or through a John Doe summons) about your non-compliance;
- Note: Quite often we can still get you through a voluntary disclosure.
- The IRS has received information from a third party (e.g., informant, other governmental agency, or the media) alerting the IRS to the specific taxpayer’s noncompliance;
- The IRS has acquired information from a criminal enforcement action related to your non-compliance (e.g., through a search warrant or a grand jury subpoena) and
- The IRS has acquired information directly related to the specific liability of the taxpayer from a criminal enforcement action (e.g., search warrant, grand jury subpoena).
Who May Disclose?
If you have intentionally violated tax laws and thus face potential criminal tax exposure, the IRS Voluntary Disclosure Practice represents a relatively secure means to return to tax compliance. This practice shields participants from possible criminal tax prosecution. If your violations were not willful, you should consult with tax counsel about less severe alternatives, such as amending previous tax returns. Taxpayers earning income from illegal sources are ineligible for the IRS Voluntary Disclosure Practice. For this practice, income generated from activities that may be legal under state law but are illegal under federal law is considered an unlawful source of income.
DOJ’s Tax Division Policy-Based Advantages
In light of recent changes, there’s an essential update to the Voluntary Disclosure Practice. The new Department of Justice Tax Division’s Voluntary Disclosure Policy encourages entities, including but not limited to partnerships, government entities, and unincorporated associations, to make voluntary disclosures to the Tax Division, even if they believe the government may already be aware of the misconduct. While full benefits of voluntary disclosure might not always be available in such cases, some benefits can still be realized, reducing potential penalties. This policy does not, however, apply to sole proprietorships.
San Jose companies can benefit from the following DOJ’s Tax Division’s policy-based advantages of voluntary disclosure:
Mitigating Criminal Tax Penalties: This policy allows DOJ Tax, under specific conditions, to opt not to seek an indictment, thereby significantly lowering the risk of imposing a criminal penalty on a corporation;
Potential Fine Reduction: The policy offers the possibility of a reduction in the Guidelines’ recommended acceptable ranges for corporations meeting the policy’s requirements;
Reduced Criminal Penalties and Fines: While corporations cannot be incarcerated, and thus traditional sentencing ranges don’t apply, corporations can still benefit from reduced criminal tax penalties and fines, contingent on their voluntary disclosure, cooperation, and remediation efforts;
Given these compelling advantages of voluntary disclosure, San Jose companies are encouraged to approach tax compliance proactively. However, this complex legal procedure necessitates experienced tax counsel. At the Tax Law Offices of David W. Klasing, our dual-licensed Tax Attorneys and CPAs stand ready to guide you through this process. We will help evaluate the potential risks and benefits, assist in full cooperation and appropriate remediation, and ensure compliance with IRS policy. Contact us today to confidently and effectively navigate the voluntary disclosure process.
Why Should You Choose the Tax Law Offices of David W. Klasing?
You must 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 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.
At the Tax Law Offices of David W. Klasing, our dual-licensed Tax Attorneys and CPAs are committed to bringing you back into tax compliance without having the harshest fines and penalties levied against you. Moreover, we can help you leverage the benefits of voluntary disclosure, even when full benefits might not be available. We aim to help you achieve substantial compliance by promptly addressing disclosure requirements, minimizing your risk exposure, and giving you peace of mind knowing that you are in good standing with the tax authorities.
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 net worth. See our Testimonials to see what our clients have to say about us!
Whether you have questions about personal or business tax compliance and voluntary disclosure programs in California or at the federal level, the award-winning tax professionals in San Jose are here to provide clarity and guidance. To discuss your tax issues confidentially via a reduced-rate initial phone or online encrypted and secure Go-To-Meeting video/audio consultation, contact the Tax Law Office of David W. Klasing online or call (408) 359-3543 / (888) 637-7690.
Our appointment-only San Jose Office is conveniently located at the following address:
2033 Gateway Place
5th Floor, Suite 500
San Jose, CA 95110
(408) 359-3543 / (888) 637-7690
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