According to the IRS website, Streamlined Filing Compliance Procedures, the streamlined procedures are available to taxpayers certifying that their failure to report foreign financial assets and pay all tax due in respect of those assets did not result from willful conduct on their part.We previously posted on Wednesday, October 1, 2014, So What Does "Non-Willful" Really Mean Under The Streamlined OVDP - Take #2? where we discussed that until the IRS gives us their specific interpretation of "Non-Willfulness" under the 2014 Streamline Program; you might want to consult the IRS's Internal Revenue Manual (IRM) for guidance!
More specifically:
- IRM 4.26.16.4.5.3 FBAR Willfulness Penalty - Willfulness
- IRM 4.26.16.4.5.4 FBAR Willfulness Penalty - Evidence.
The validity of this conclusion is further supported by Jennifer Best, senior attorney-adviser for services and enforcement, who recently indicated that the IRS has deliberately refrained from offering a lot of examples about what constitutes willful failure to disclose offshore assets.
Taxpayers are only allowed to use the Internal Revenue Service's streamlined offshore voluntary disclosure program, when they have failed to report foreign income or foreign financial accounts or assets, if they can certify that their failure to do so was non-willful.
As reported in DTR on 10/17/14, Best told a group at an American Law Institute Continuing Legal Education program in Washington, every taxpayer has a unique set of circumstances, therefore the definition of the term was intentionally left broad!
In other words, after you review IRM 4.26.16.4.5.3 and IRM 4.26.16.4.5.4; if you have any doubts that your client is non-willful, then your client does not qualify for the streamline program!
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