This is an excerpt from a post at RenounceUScitizenship. Most of the rest of the post already appears here. That said, for those who what more …
I wrote an earlier post that discussed how to select the right tax preparer to do your U.S. tax returns on a going forward basis. Many people fear that the IRS cannot be trusted. But, can we trust the cross border professionals? The purpose of this post is to share some thoughts on how to get the “professional help” required to clean up past compliance issues. This should be considered in terms of (at least) the following four factors:
How to decide who to retain for professional help
First – You have a compliance problem. This is different from a tax problem. The tax problem may have caused the compliance problem, but now your problem is to bring yourself into compliance. Hence, you need a professional who is experienced with U.S. tax compliance issues. You do NOT go to your local tax preparation firm. You do go to a lawyer experienced in compliance issues.
Second – Your specific facts must be understood. The most important principle is to find somebody who will really take the time to understand your situation. There are infinite permutations of facts – some helpful and some not so helpful. Your route to compliance must be based on an analysis and understanding of your specific situation. Any adviser who recommends a specific course of action (for example OVDI or compliance going forward) without a lengthy discussion of your history should NOT be retained. Your decision must be the result of an analysis of you and your tolerance of risk. Your lawyer will need to write “reasonable cause” letters. The effectiveness of the letter is a function of an understanding of your facts.
Third – You need to be able to speak freely, honestly and openly. Because the decision is the result of an analysis of your specific factual situation, you should consult with a lawyer. You need to be able to share all relevant facts with the professional. Consultations with lawyers are subject to “lawyer client privilege”. Consultations with accountants are not. Lawyers cost more, but that’s life.
Fourth – the lawyer who advises you on what to do, doesn’t have to be the same as one who helps you actually come into compliance. Seeking professional advice in the compliance area is similar to obtaining the services of a financial planner. There are “fee based planners” and planners who survive off commissions from the sale of products. There are planners who charge for their advice on an hourly basis. There is an analogy here. The reality is that it is in the financial interest of the lawyer for you to be in OVDI (or something elaborate). For this reason, you might consider:
Using one lawyer to help you decide how to come into compliance;
And use a different lawyer to bring yourself into compliance.
To put it another way, you might consider simply paying for a “compliance consultation” where it is clear that you will NOT be retaining that lawyer to bring you into compliance. This could be the best money you will spend. You can use lawyers for different things or for specific purposes. Then, move onto the decision of what lawyer to use to bring you into compliance. In other words, the decision to undergo surgery is different from the decision of who will be the surgeon.
The complete post from which this was excerpted is here.