ABA Tax Section Meeting Developments on Streamlined Disclosures

Andrew Velarde,  No Letters of Intent Allowed Before Entering Streamlined Program, 2015 TNT 22-7 (2/3/2015)

 1.  The IRS will not offer for the streamlined programs any analog to pre-clearance that is offered in the full-blown OVDP.  Taxpayers thus, theoretically, are at risk until they make the submissions required by the streamlined programs. The taxpayer receives no official acceptance if their request is approved, basically no news is good news with a 3 to 6 year potential audit period.
2.  The IRS has not yet developed statistics on the streamlined program (taxpayers joining and those rejected).
3.  The flagging of streamlined cases with at least 5 foreign information returns.  The IRS representative "said the initial examination referred to in the IRM is more for completeness and coherence.
4. There is no solution in sight to the long delays for some long-time foreign residents without Social Security Numbers (SSNs).  The problem is that those taxpayers, often prime candidates for the streamlined solution, cannot pursue the solution until they get SSNs, but have significant difficulty and time delays in getting SSNs. ( So long as the US taxpayer has begun the process of applying for a SSN, he can submit to the IRS the required Streamlined (or OVDP) paperwork along with a passport copy and a cover letter explaining that the SSN has been applied for. The IRS will issue a special IRS number for that taxpayer to use on all correspondence with the IRS. Once the SSN is obtained, the taxpayer must advise the IRS).
 5.  LoL....the IRS representative said that the IRS will not issue additional guidance on the meaning of willfulness in the streamlined program.

The problem continues to be that the IRS’ right hand does not know what the left hand is doing.