Appellate Court Says IRS Can Compel You to Produce Self-Incriminating Offshore Bank Account Records

7:38 pm Offshore Trusts, Tax Planning

IRS Logo 150x150 Appellate Court Says IRS Can Compel You to Produce Self Incriminating Offshore Bank Account RecordsThe Seventh Circuit Court has become the second appeals court in the past year to rule that taxpayers must supply offshore bank account records to the IRS, even if those records are self-incriminating (In Re: Special February 2011–1 Grand Jury Subpoena).

Most people are not aware that there is an exception – called the Required Records Doctrine – to the Fifth Amendment barring self-incrimination.  The courts have determined that your rights are not violated under the Required Records Doctrine if:

  • The government’s inquiry is essentially regulatory;
  • The information is a preserved record of a kind customarily retained; and
  • The records have taken on public aspects making them analogous to a public document.

The IRS has become increasingly vigilant in pursuing those who neglect to report foreign bank account income.  Last year, it reopened its Offshore Voluntary Disclosure Program indefinitely to enable violators to voluntarily report offshore account information and pay back taxes and penalties without prosecution.

Program participants must file all original and amended tax returns and include payment for back-taxes and interest for up to eight years as well as paying accuracy-related and/or delinquency penalties.

Get started by contacting our Orange County asset protection estate planning law firm as soon as possible.

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