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For streamlined audits, a sensitive topic existence of any foreign assets to the return The taxpayer and his advisors should always
will be the taxpayer’s decision to use the preparer, that is something that should be keep in mind that the basis of making a
streamlined procedures instead of entering discussed with counsel prior to deciding streamlined submission is nonwillfulness
the OVDP. Where this decision was made upon a streamlined submission. and be prepared for the IRS to request infor-
with counsel, as it should be, any response mation and documents to satisfy itself that
to such inquiry will be subject to the attor- Don’t Panic the taxpayer did not act willfully. q
ney-client privilege. When a taxpayer receives a streamlined
As long as the taxpayer and her advisors audit notice, the initial reaction may be Cassandra Vogel, JD, is a former asso-
were careful in preparing the streamlined dread. With careful planning and prepara- ciate at Kostelanetz & Fink LLP, New
submission and there are few or no indi- tion, however, the process can go smoothly. York, N.Y.
cations of willfulness, the interview should
proceed smoothly. If there are grey areas
or sticky facts, however, the taxpayer
should be fully prepared for the IRS to NYSSCPA
question those circumstances thoroughly.
Return preparer interview. The IRS
may also request a formal interview of the
taxpayer’s return preparer. The return pre- Thanks Its Loyalty Media
parer should be prepared for this eventuality,
particularly in cases where the same return WƌŽŐƌĂŵ ĚǀĞƌƟƐĞƌƐ͗
preparer prepared the taxpayer’s original
returns and the amended returns submitted
through the streamlined procedures. ▶
As with the taxpayer, the return preparer
should expect to face questions about his
background. The IRS will also likely inquire
into the return preparer’s procedures for
preparing a tax return for a client. In addition,
questions about the return preparer’s rela-
tionship with the taxpayer, as well as their
general communications and interactions
with the taxpayer, should be expected.
The return preparer should be familiar
with the taxpayer’s nonwillful narrative. It
is critical that the return preparer has the
same understanding of the facts as the tax-
payer. If, for example, the taxpayer asserts
that her return preparer never asked her
about the existence of offshore assets, the
return preparer should be able to testify to
the same. Along the same lines, a preparer
is likely to face questions about why he
did not ask the taxpayer if she had any off-
shore assets, especially if the taxpayer has ▶
dual citizenship or spends time abroad.
Another question that the return preparer
is likely to face is whether the taxpayer If you are interested in learning more about NYSSCPA’s
ever received a questionnaire, and if so, Loyalty Media Program, contact Allison Zippert at
whether that questionnaire asked about for- 410.584.1971 or azippert@networkmediapartners.com.
eign assets. If the taxpayer did receive a
questionnaire and failed to disclose the

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