Under the Fifth Amendment, no person shall be compelled to incriminate him or herself without due process of law. While this Constitutional right has generally been considered sacrosanct in most criminal proceedings, it has virtually been ignored when it comes to the reporting and collection of federal income taxes. Beginning with U.S. v. Sullivan, federal courts have held that a taxpayer could not use the Fifth Amendment as a basis to avoid one’s federal tax liability. U.S. v. Sullivan, 274 U.S. 259 (1927).
Recent federal court cases have expanded this ruling to now allow foreign financial institutions and governments to turn over offshore bank account records, sought in criminal tax investigations, to the Internal Revenue Service (IRS). According to the 5th, 7th, and 9th Circuits, the Fifth Amendment does not apply in these instances because it only prohibits compelled testimony. It does not prohibit the production of records. Furthermore, the U.S. Supreme Court has held that the privilege against self-incrimination under the Fifth Amendment does not bar the government from imposing record-keeping and inspection requirements, such as required by FBAR, as long the government’s inquiry is essentially regulatory, the records requested are customarily retained, and the records have taken on public aspects making them analogous to a public document.
Givner & Kaye focuses on sophisticated income tax planning and compliance, tax litigation and procedure, estate planning, and asset protection plans for individuals and businesses in Beverly Hills, Calabasas, West Los Angeles, Hollywood, and other areas of Los Angeles, Orange, Ventura, San Bernardino, Riverside and Santa Barbara Counties. Call Los Angeles Estate Planning and Asset Protection Plan Attorneys Givner & Kaye at (310) 207-8008 today.