It is important to understand why the attorney client privilege matters in IRS issues involving foreign assets. The attorney-client privilege is a solid legal protection that allows a client to discuss the details of foreign accounts and assets with our experienced tax attorney Janathan Allen without concern of disclosure to the IRS.
“As your attorney, I will need comprehensive information about your foreign assets and investments, how they were reported, and the nature of those funds and assets in order to be able to effectively advise you,” noted Janathan Allen. “The attorney-client privilege protects all of your information so that you can make full disclosure of what has happened, strategize how and what to communicate to relevant tax authorities, and which programs or forms offer the best chance for a successful outcome in your case.
One of the most important reasons the attorney client privilege matters in IRS issues involving foreign assets is the IRS’ access to your offshore financial account information. Recent developments involving international banking and investment accounts, and other financial institutions around the world make it possible for the IRS to access specific account information and associate it with a unique tax payer ID. The IRS receives direct disclosures from these institutions and pours through that information seeking audit targets.
This has impacted not only the number of audits relating to foreign assets and income, but the acceptance or denial of those who have applied through disclosures to seek protection for or relief from FATCA and FBAR related penalties, even criminal exposure.
If you have been contacted by the IRS, or the State of California on a tax matter relating to foreign accounts it is important to understand why the attorney client privilege matters in IRS issues involving foreign assets.