Tax Experts: Is Your Offshore Tax Attorney Really an Expert?

Tax Attorney Expert

What is an Offshore Tax Law Specialist?

Ever since the Internal Revenue Service increased its enforcement of offshore disclosure and compliance matters, many less-experienced attorneys have jumped in the mix, making false representations about their experience — and leading taxpayers astray. And, when these attorneys take on cases that they are not experienced enough to handle, it can result in professional malpractice. Unfortunately, when an attorney commits professional malpractice in the offshore disclosure world, it can have a significant impact on the client who may have been goaded into submitting to one type of IRS foreign disclosure program when in fact they did not qualify and/or should have submitted to a different program. First, let’s look at a few ways that taxpayers can best select an offshore disclosure lawyer. Then, let’s look at what causes professional malpractice in offshore disclosure-type cases.

*Beware of law firms falsely claiming to have Board-Certified tax law attorney specialists on staff.

Board-Certified Tax Law Specialist Summary

Board Certified Tax Law Specialist: When an Attorney refers to themselves as a Tax Law Specialist, it does not mean they are Board Certified in Tax. The term “specialist” when it comes to tax connotes that a person handles that specific area of tax exclusively; in other words, they specialize exclusively in a type of tax law such as offshore tax disclosure. By stating you are a tax law specialist, you are making representations to the general public that you have extensive experience in an area of law.   The specialist exam for Tax specifically, is known to be notoriously difficult. And, in addition to passing the exam, in order for a person to be Board-Certified — they must also meet rigorous ethical and experience requirements as well. Unless a person is a “Board-Certified Tax Law Specialist” and designated a ‘Board-Certified Tax Law Specialist’ by at least one State Bar (even if they practice federal law) chances are they are just using a marketing gimmick to try to fool the general public about their true experience level.

Becoming a California (Board-Certified) Tax Specialist

Becoming a Board-Certified Tax Specialist is a tough feat. The specialist exam for Tax specifically, is known for being extremely difficult. There are more than 200,000 attorneys in California, and tens of thousands of them practice in some area of tax. Whether they are full time tax attorneys or they practice tax law as part of a bigger practice such as estate planning, real estate, divorce, corporate and business law, or acting as outside counsel — tax law is everywhere.

Less Than 350 Board-Certified Tax Law Specialists in California

In California alone, there are less than 350 Board-Certified Tax Specialists. Why? Because the test is brutal. It covers many different areas of tax, oftentimes areas that are not even included in the practitioner’s daily area of practice. Tax Specialist Exam study materials are scarce at best, and basically the practitioner has to rely upon is his or her experience to complete the full-day exam.  And, in order for a person to be Board-Certified — the applicant must also meet rigorous ethical and experience requirements as well.

Is Your Lawyer Falsely Representing They Are a Board-Certified Tax Lawyer Specialist?

While both CPAs and attorneys may handle tax matters, a Certified Public Accountant (CPA) or Enrolled Agent (EA) is not the same as a tax attorney. The roles of non-legal tax professionals (CPA and EA) are different than the role of an Attorney. Beyond these designations, some tax lawyers are also licensed as Board-Certified Tax Law Specialists, which means they are licensed by at least one State Bar’s Board of Legal Specialization.

Recently, we have had taxpayers let us know that they had engaged in an initial consultation with a law firm that claims to have Board-Certified Tax Lawyer Specialists on staff — only to learn that there are no attorneys at the firm who are licensed as a Board-Certified Tax Attorney Specialist by any State Bar in the United States. 

The firms claim they are “Board-Certified Tax Law Specialists” because they may have a CPA on staff. Preposterous. The only way to become a “Board-Certified Tax Law Specialist” is for an attorney to complete additional years of specialized tax education, pass a rigorous examination, and officially receive the designation from the State Bar. Many CPAs have no background at all in tax and just because a lawyer obtains a CPA designation does not mean they can call themselves “Board-Certified.”

Why is any of this important?

Board certification is not easy to achieve. Obtaining a specialized designation is quite difficult and clients can be confident that their attorney has completed the necessary training and testing. Designations are earned. How can you trust an attorney who is lying about their background? If a lawyer is willing to make false claims about these types of designations, then perhaps they are also willing to take some unethical leaps with billing?

Tax Attorney Marketing Gimmicks

Here are some common tax marketing gimmicks to be aware of.

Attorneys who call themselves “Experts”

Attorneys are not experts and state bars across the country have very strict rules about making these types of misleading statements to the general public. If your attorney is calling himself or herself an Expert, you should be careful.

“Tax Law Specialist” or “IRS Tax Law Specialist”

Anyone can hold themselves out to be a specialist, but unless they are a Board-Certified Tax Specialist, oftentimes it is just smoke and mirrors designed to make the general public believe they have more experience than they actually do.

In fact, the IRS position of “Tax Law Specialist” is an entry-level position that does not require any tax background or even a law degree.

“Previously Worked for the IRS”

Some attorneys tout experience at the “IRS” despite having no experience in IRS Offshore Disclosure. The IRS has nearly 100,000 employees. Most of these positions do not require any tax, legal, or accounting background.

Just being a prior employee such as an “IRS Agent or Examiner” for the IRS does not qualify a person as an Offshore Disclosure expert or specialist.

“Specialize in IRS Voluntary/Offshore Disclosure” 

Anyone can represent that they specialize in IRS Voluntary/Offshore Disclosure, but some firms will say that they specialize in this area of law, and yet according to their website, they handle other different types of tax, such as general audits, collections, offers-in-compromise, etc.

Yes, technically in some states, a person can market that they specialize in an area of law, but many times it is just a marketing ploy designed to build confidence to a potential client when the attorney is not qualified to do so.

This is a misrepresentation to the public and since the public relies upon attorneys to handle very complex situations, it is important to try to work through the marketing ploys of attorneys and find actual board-certified attorneys who can assist you properly in the particular area of law that you need help in.

Examples of recent cases we had to take over from less experienced Attorneys can be found by Clicking Here (Case 1) and Clicking Here (Case 2).

“Super Lawyer” “Rising Stars,” “Best Lawyers” and others…

These are not credentials an attorney earns. These are “awards,” and most states require very specific limitations on advertising these awards. Numerous grievances have been filed nationwide by unhappy clients when the legal representation by a Super Lawyer did not end up being so…super.

American Bar Association & Attorney Experts

Back in 2013, the American Bar Association published a great article “Think Twice Before Calling Yourself an Expert“ about how the going theme is that attorneys with about 10-15 years of experience, and a focus on one specific area of law, will suddenly start referring to themselves as experts – and how it is very dangerous territory for the client and attorney.

Here are some of the key highlights:

• • • “You have been in practice for 15 years. After starting out as a general practitioner, you found your caseload to be largely made up of employment law matters and after five years decided to limit your practice to that area. You have family who are union members, and word-of-mouth advertising has been positive.

    • Results from your work have been satisfying to clients, and your familiarity with the various laws relevant to employment matters is now solid. You teach a course at a local law school on employment law and frequently give workshops and guest lectures at seminars on the same topic. Can you now say you are an “expert” in employment law on your website?

    • “You should think twice before doing so.”

    • “Put another way, use of the term expert is a subjective claim that leaves much to the reader’s imagination. In doing so, it can easily cross the line into false and misleading communication. State bar ethics opinions are unanimous on this point….”

    • Risk of Discipline?

      • “Lawyers have been disciplined for making misleading claims of expertise. See In re PRB Dockett No.2002.093, 177 Vt. 629, 868 A2d. 709 (2005) (affirming discipline imposed upon lawyer who advertised in the local Yellow Pages as The Injury Experts and used a list captioned by the words “We are experts in” and listed several areas of law; court noted statements carried an “ implicit statement of superiority with a serious potential to mislead the consumer”); In re Wells, 392 S.C. 371, 709 S.E.2d 644 (2011) (lawyer publicly reprimanded and fined for, among other things, making claims of expertise in advertisements without having been certified as an expert); and In re Richmond’s case 152 N.H. 155, 872 A.2d 1023 N.H. (2005) (lawyer suspended for misrepresenting that he had expertise in securities law).”

How Long Has the Attorney Been Licensed?

Offshore disclosure is a specialty area of international tax. Most experienced attorneys in this area of law have been practicing for at least 15-20 years and specialize exclusively in international tax and offshore disclosure. 

Are They a Board-Certified Tax Law Specialist?

Any tax attorney who practices in offshore disclosure should be a Board-Certified Tax Law Specialist and practice exclusively in offshore disclosure matters. Since international tax at the federal level does not require the tax attorney to be licensed in any one particular state, attorneys will either become certified in the state where they reside/practice or in a different state if their state does not offer that option. 

Offshore Disclosure Does Not Involve Litigation

Offshore disclosure does not involve litigation. There are no court cases and no appearances before a judge. Unfortunately, when it comes to offshore disclosure, litigators tend to be too aggressive in situations when it is not required, making it unnecessarily adversarial — which can hurt the outcome of the disclosure. For taxpayers who want to sue the IRS or are being prosecuted by the U.S. government, they will want to engage a Board-Certified Criminal Law Specialist.

Case Leader or Just a Cog in the Wheel?

Oftentimes, when taxpayers approach us after becoming dissatisfied with their prior attorney, it is because the attorney was nowhere near as experienced as they led the client to believe.

For example, when a tax professional claims they have handled hundreds of offshore disclosure cases, it is important to determine what aspect of the submission they performed. Were they the case lead or did they just assist the senior partner as a support attorney? 

If they are a partner at a law firm, how long have they been a partner and how many offshore cases have they actually led? 

Dual-Licensed as an EA or CPA

With offshore disclosure matters, the tax and the legal are intertwined. Thus, any attorney that the taxpayer hires to handle an offshore disclosure matter should also be licensed both as an attorney and either as an Enrolled Agent or a CPA.

Knowingly Going Streamlined When Willful

When an attorney wants to retain a client that they know is willful, but the client does not want to enter VDP (which is completely understandable) some attorneys will still submit them to the streamlined disclosure program – even when it is obvious to both the attorney and the client that the client is non-willful and ineligible for the streamlined procedures. For it to reach the level of professional malpractice, it typically requires a situation in which the taxpayer and the attorney both agree the client is willful, but the attorney still submits the taxpayer to the streamlined procedures anyway.

Not Completing the Submission Process

Some Attorneys who do not specialize in this area of tax may get overwhelmed during the disclosure process because they are unfamiliar with many of the terms, acronyms, and the sheer magnitude of what is required to properly complete one of these types of submission procedures. Over the years, we have had many taxpayers reach out to us to let us know that at some point during the representation process — but before the matter was resolved — they were ghosted by their attorney, and the attorney no longer responds to their inquiries.

Intentionally Underreporting Client Assets or Income

If an attorney knowingly works with a client to submit to one of these disclosure programs but agrees with the client to intentionally exclude certain assets or income because the client does not want to report them to the IRS or FinCEN, this too can be a form of professional malpractice since the attorney is knowingly submitting an inaccurate tax return.

Quiet Disclosure

Sometimes, a taxpayer wants to get into compliance by either submitting prior year returns or the current year’s return without first getting into compliance for prior years. This is referred to as making a ‘quiet disclosure.’ If an attorney or other tax professional submits a quiet disclosure knowing that they are submitting documents to the IRS outside of the approved rules and procedures, this can lead to professional malpractice since the attorney signed the tax return and intentionally submitted false documentation to the IRS (knowing that there were other procedures that they were supposed to follow).

Late Filing Penalties May be Reduced or Avoided

For Taxpayers who did not timely file their FBAR and other international information-related reporting forms, the IRS has developed many different offshore amnesty programs to assist taxpayers with safely getting into compliance. These programs may reduce or even eliminate international reporting penalties.

Current Year vs Prior Year Non-Compliance

Once a taxpayer missed the tax and reporting (such as FBAR and FATCA) requirements for prior years, they will want to be careful before submitting their information to the IRS in the current year. That is because they may risk making a quiet disclosure if they just begin filing forward in the current year and/or mass filing previous year forms without doing so under one of the approved IRS offshore submission procedures. Before filing prior untimely foreign reporting forms, taxpayers should consider speaking with a Board-Certified Tax Law Specialist who specializes exclusively in these types of offshore disclosure matters.

Avoid False Offshore Disclosure Submissions (Willful vs Non-Willful)

In recent years, the IRS has increased the level of scrutiny for certain streamlined procedure submissions. When a person is non-willful, they have an excellent chance of making a successful submission to Streamlined Procedures. If they are willful, they would submit to the IRS Voluntary Disclosure Program instead. But, if a willful Taxpayer submits an intentionally false narrative under the Streamlined Procedures (and gets caught), they may become subject to significant fines and penalties. 

Need Help Finding an Experienced Offshore Tax Attorney?

When it comes to hiring an experienced internationaltax attorney to represent you for unreported foreign and offshore account reporting, it can become overwhelming for taxpayers trying to trek through all the false information and nonsense they will find in their online research. There are only a handful of attorneys worldwide who are Board-Certified Tax Specialists and who specialize exclusively in offshore disclosure and international tax amnesty reporting. 

Golding & Golding: About Our International Tax Law Firm

Golding & Golding specializes exclusively in international tax, specifically IRS offshore disclosure. 

Contact our firm today for assistance.