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Civil Tax Audits

 

At Thorn Law Group, we specialize in representing taxpayers, employers and entities under civil audit by the Internal Revenue Service.  As former attorneys for the Internal Revenue Service, we know how the IRS operates and how its Revenue Agents are required to proceed in civil tax audits.

IRS Increases Information Document Requests for Offshore Accounts:

In the wake of the Internal Revenue Service (IRS) Offshore Settlement Initiative Voluntary Disclosure Program and UBS AG investigation, there will likely be a surge in IRS Information Document Requests focusing on offshore bank accounts.  Offshore tax evasion remains a top enforcement priority for the IRS, which will continue to step up pressure on U.S. taxpayers with undisclosed offshore accounts.

In the next three to six months, taxpayers with undisclosed offshore accounts that are  under IRS investigation will receive from the IRS a Form 4564, Information Document Request.  The IRS will focus Information Document Requests on U.S. taxpayers with offshore assets and accounts that failed to disclose these interests to the U.S. government on their Form 1040, U.S. Individual Tax Returns, and file a corresponding Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR).

An Information Document Request is a formal request from the IRS for a taxpayer’s books, papers, and other data relevant to the validity of their individual tax return.  The Information Document Request is a formal and structured process for the IRS to request and secure information from taxpayers, including information regarding offshore bank accounts.  Although less formal than a subpoena, the Information Document Request carries with it consequences for failure to cooperate and can lead to further investigation into offshore tax evasion and additional sanctions.

An information document request is significant because it precludes a taxpayer from participating in the IRS’s traditional voluntary disclosure program.  Like the Initiative, a traditional voluntary disclosure provides taxpayers with previously undisclosed foreign accounts with a way out—potentially avoiding the most severe civil penalties and criminal prosecution.

Thorn Law Group attorneys assist our clients in presenting their tax reporting positions to the IRS.  We work with our clients and the IRS to efficiently manage the audit and to resolve tax disputes involving income tax, employment tax, estate and gift tax, excise tax, information reporting, and tax-related penalties.

For more the most up-to-date information on civil audits and offshore accounts, please visit:

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Contact Kevin E. Thorn, Managing Partner at ket@thorntaxlaw.com or 202-349-4033 if you have been contacted by an IRS Revenue Agent for an audit.  We will work with you and the IRS to manage the audit process and assess your options if disputes regarding your tax liabilities arise.