The prospect of an IRS audit has always been frightening. With the recent push by the IRS to find every offshore account and punish taxpayers for trying to hide these accounts, what tax attorney Rob Wood describes as “IRS-induced grief” is a more common occurrence. Wood discusses the subject in his Forbes article “Five Stages Of Grief, IRS Version.”
The five stages of grief—denial, anger, bargaining, depression, and acceptance—were postulated by Swiss-American psychiatrist Elisabeth Kübler-Ross in her 1969 book, On Death and Dying. Wood draws an analogy between Kübler-Ross’s five stages and the things that taxpayers go through when they are acknowledging their offshore accounts.
“People do go through . . . peaks and valleys, emotionally and mentally” when they try to come to grips with their offshore account problem. “It’s an interesting emotional gamut.” Wood suggests that it is human nature to rationalize our behavior, to come up with theories that somehow the problem is not our fault.
Wood believes that it is helpful for taxpayers to talk about their tax problems, to actually tell someone about the problem. And the rules about offshore accounts are not difficult to understand. “The basic U.S. rules may be harsh, but they aren’t that complicated.” It may come down to how big a risk a taxpayer is willing to take. Thinking about these problems may produce the kind of emotional responses Wood discusses in his article.
For more information on the subject, please refer to Mr. Wood’s article in Forbes. Robert Wood is a tax attorney with Wood, LLP in San Francisco, California and spoke with The Tax Law Channel, an affiliate of The Legal Broadcast Network. The Legal Broadcast Network is a featured network of the Sequence Media Group.