A Wall Street Journal article of July 27, 2016, “How Inaccurate Memories Can Be Good for You,” by Sue Shelenbarger, discusses a number of studies that found benefits to people from even inaccurate memories. More important that accuracy is that fact that recalled events from the past help define ourselves and create plans for the future.

But, these benefits do not change the well-established fact that our belief in the reliability of our ability to recall events accurately is highly overrated. The studies show, writes the author, that “memories are not just a storehouse for facts, but a creative blend of fact and fiction.” The author cites numerous examples of how we distort memories. These unconscious distortions can slip into the narrative that clients will tell attorneys assisting with streamlined filings. Here are some examples.

• The client may fictionalize a past event or just imagine something that never actually happened.
• The client may confuse when the recalled event occurred.
• The client may accentuate the helpful details and ignore or diminish in importance other details.
• The client may change the memory to conform to what is helpful.
• The client may change the memory based on information gleaned from recent sources like the internet.

In fact, we alter a memory a bit every time we recall the happening from our memory banks. The attorney must be attuned to the fact that memory is inherently unreliable. In relating their stories about offshore accounts clients may infer positive facts and ignore inconvenient facts. These distortions may be unconscious tricks of memory or intentional misstatements. The internet, including this blog, contains much information about what facts will likely establish non-willfulness and what acts will likely be viewed by IRS as indicative of willful conduct. People facing a tax noncompliance problem may unconsciously weave these published facts into their own story.

Thus, absolute, unclarified statements of fact based solely on memory may turn out to be false statements. The non-willful certification is signed under penalties of perjury. Material misstatements could lead to a perjury charge. Thus, statements based solely on memory should be preceded by a clarification or disclaimer phrase, “to the best of my recollection and belief.”

Still, the attorney should carefully interview the client to try to prod and probe his or her memory, to challenge inconsistencies, to seek the truth about how the offshore account came to be opened and how it was operated, from where funds came and to what other accounts funds were transferred; and, to establish the real beneficial owners of the accounts.

To the maximum extent possible statements of fact should be based on documentary evidence such as the account opening documents, withdrawal and deposit slips, bank statements, correspondence and emails. The foreign financial institution will likely have these documents and may also have recordings of telephone discussions. Do not assume that the truth will not be uncovered.

Relying on memory alone in making statements in the streamlined non-willful certification is dangerous.  As previously stated, the attorney should add a clarification or disclaimer statement for any facts included in the non-willful certification that are based solely on the client’s memory.

The first rule for any attorney assisting clients out of compliance is “Do no harm.” Do not make things worse than they are already by filing an inaccurate non-willful certification. The non-willful certification is an affidavit that should be given the respect any document signed under penalties of perjury deserves. Caution should be the watchword. Make sure that the non-willful certification is truthful, detailed and completely transparent, stating both good and bad facts.

Robert S. Steinberg, Esquire

This entry was posted in STREAMLINED FILING COMPLIANCE PROCEDURES, Uncategorized and tagged , . Bookmark the permalink.


  1. Reblogged this on U.S. Persons Abroad – Members of a Unique Tax, Form and Penalty Club and commented:
    “Past recollection recorded vs. present recollection revived.”

    What you are saying is the the current non-willful statement needs to be consistent with the objective documented facts. Nothing more and nothing less.

    It strikes me that you must be primarily advising U.S. residents (who at least understand that they should have been filing U.S. taxes) and NOT Americans abroad who had no idea that they should have been filing U.S. taxes.

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