Protection under the Attorney-Client Privilege
Individuals who are considering making a voluntary disclosure should seek the assistance of an attorney.
The failure to file an income tax return, filing a false income tax return, wilfully failing to file an FBAR or filing a false FBAR can be crimes punishable by imprisonment and substantial fines. While the 2011 Offshore Voluntary Disclosure Initiative provides the opportunity to avoid criminal prosecution, legal counsel can help determine if an individual is eligible for the program, the risks of criminal prosecution, and the courses of action to bring the accounts into compliance.
Importantly, conversations with other professionals, such as accountants, may be subject to disclosure. Communications with an attorney, however, may be shielded from disclosure by the attorney-client privilege. Legal counsel becomes the taxpayer's advocate with the IRS and can protect against the taxpayer making incriminating statements or disclosing too much information.