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Finding an FBAR Lawyer to Help Avoid Criminal Charges

How to Find a Good Tax Attorney

FBAR Lawyer to help clients avoid Criminal Charges by the IRSYou’ve discovered you have to file the Foreign Bank Account Report but are having trouble finding an FBAR attorney. As you search across the web, it may seem as though there are attorneys for any number of issues, except this specific one.

If you’re looking for an FBAR lawyer, but having trouble finding the right person for your case, you aren’t alone. In fact, there is actually no such thing as an “FBAR lawyer”. FBAR is simply shorthand for a Foreign Bank Account Report which must be filed with the IRS.

The Report of Foreign Bank and Financial Accounts (FBAR) requires taxpayers with accounts totaling more than $10,000 to file an annual report with the U.S. Treasury. For taxpayers with offshore accounts totaling more than $50,000 during 2011, a brand new requirement came into effect – Form 8938 (Statement of Foreign Financial Assets).

With the full enforcement of the Foreign Account Tax Compliance Act (“FATCA”) on July 1, 2014, all foreign banks began requiring their U.S. account holders to disclose their social security numbers and other information. Banks do this to both protect themselves, and to report U.S. account holders who have foreign accounts to the IRS. But the IRS knows that most people aren’t willfully evading taxes. The creation of the Offshore Voluntary Disclosure Initiative, offers reduced civil penalties for taxpayers who come forward with unreported accounts and can ensure that you don’t face FBAR criminal penalties.

Given the recent publicity surrounding FBARs, and the civil and criminal penalties associated with the failure to file an FBAR, individuals with offshore accounts and tax issues are on the hunt for an FBAR attorney. Stop searching for an “FBAR attorney” and focus your search on a premier tax attorney.

If you don’t come forward and disclose your foreign assets, you could face a civil FBAR penalty of $10,000 per account, per year. You read that right. That means if you have 5 years and 20 accounts in each year, you could face a $1M FBAR penalty, even if all those accounts combined only held $11,000. Tack on the potential criminal penalties, and you’ll wish you had spent a little time and money up-front talking to a tax professional.

You don’t need just any tax attorney, though. With the aggressive nature of the IRS audit process and the possibility that criminal charges can be brought for failure to file FBAR, you should seek out a tax attorney with both tax litigation and criminal tax skills to help you navigate the murky waters of IRS disclosure.

This is not an area of the law you want to try to go it alone. Seek out a qualified tax attorney with experience litigating and handling the IRS. If you choose to go alone, or choose to ignore the filing requirement altogether you could face thousands in civil penalties and jail time.

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No 5th Amendment Privilege in Submission of Foreign Bank Accounts Records

5th amendment privilegeThe US District Court for the District of New Jersey has applied the required records doctrine to documents required to be maintained under the US Bank Secrecy Act (BSA), and thus rejected taxpayers’ argument that they can refuse to produce such documents by invoking their privilege against self-incrimination under the Fifth Amendment to the US Constitution (United States of America vs. Eli Chabot and Renee Chabot, Civ. No. 14-3055 (FL W), 3 October 2014).

On May 12, 2012, Eli and Renee Chabot, appeared in front of the IRS to testify. The Chabots, on the advice of counsel, asserted their Fifth Amendment privilege and refused to answer any IRS questions about foreign bank accounts.

On June 20, 2012, the IRS issued another summons, requesting the parties to give testimony and produce extensive documents about foreign bank accounts. On July 13, 2012, the Chabots’ counsel advised the IRS that the Chabots would not appear, were asserting their Fifth Amendment privilege, and declined to produce the requested documents.

The US District Court stated that the required records doctrine applies if the following requirements are met:

-The purposes of the government inquiry must be essentially regulatory

-Information is to be obtained by requiring the preservation of records of a kind that the regulated party has customarily kept

-The records must have assumed public aspects that render the records at least analogous to public documents

In the case of the Chabots, the Court determined that the required records doctrine prevented the taxpayers from asserting their Fifth Amendment privilege, and the court granted the IRS’s petition to enforce its summons served on the taxpayers.

 

 

 

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FBAR Failure Leads Connecticut Executive to Plead Guilty to $8.4 Million Tax Evasion

Prosecutors announced Jan. 20 that a Connecticut business executive has pleaded guilty to willfully failing to report offshore bank accounts to the IRS.

Tax Evasion, Offshore Account filing taxes with the IRSAs part of his plea, which was entered Jan. 16 2015 before Magistrate Judge Debra Freeman of the U.S. District Court for the Southern District of New York, George Landegger of Ridgefield, Conn., agreed to pay a civil penalty of more than $4.2 million and more than $71,000 in back taxes.

According to the charges in a criminal information, Landegger maintained undeclared accounts at an unidentified Swiss bank based in Zurich from at least the early 2000s until 2010. His undeclared assets reached a high value of over $8.4 million in that period.

If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, exceeding certain thresholds, the Bank Secrecy Act may require you to report the account yearly to the Department of Treasury by electronically filing a Financial Crimes Enforcement Network (FinCEN) 114, Report of Foreign Bank and Financial Accounts (FBAR).

According to prosecutors, a representative of the Swiss bank referred Landegger to a Zurich-based attorney, Edgar Paltzer, to form a sham entity to hold his undeclared accounts. In April 2009, Landegger met with the bank representative and another individual to discuss the future of his undeclared accounts in light of the news about a U.S. investigation into hidden accounts at another Swiss bank, UBS AG, according to the charges.

At the meeting, prosecutors said, Landegger affirmatively rejected the possibility of disclosing his undeclared accounts to the IRS through its Offshore Voluntary Disclosure Program or otherwise. Instead, he shifted the assets out of Switzerland into a new, declared account in Canada and an account kept by another person in Hong Kong.

“The benefits of citizenship or residency in the United States come with certain obligations, including, as George Landegger well knew, the legal requirement to report foreign bank accounts,” U.S. Attorney Preet Bharara said. “He will now pay for his illegal conduct.”

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Secret Foreign Bank Accounts Are Not Secret Anymore…

Secret Foreign Bank Accounts

Secret Foreign Bank Accounts are not secret anymoreSecret foreign bank accounts have been at the center of money laundering. This is especially with reference to offshore bank accounts.  It is very common for people to hide money in secret foreign bank accounts in other countries in an effort to avoid paying taxes on the monies.

A Case Where a Businessmen & Attorney Collude to Hide Money in Secret Foreign Bank Accounts

In the case, United States v. Kerr, D. Ariz., No. 2:11-cr-02385, which Bloomberg reports, two businessmen and an attorney were charged in U.S. District Court for the District of Arizona for hiding more than $8,000 million in assets in foreign bank accounts that were kept a secret.

The prominent Phoenix businessmen, Stephen M. Kerr & Michael Quiel, solicited the services of a former San Diego attorney in committing this crime.

The attorney, Christopher M. Rusch, assisted the two businessmen to set up secret foreign bank accounts Switzerland. The Swiss accounts were set up in the name of nominee entities concealing the identity of Kerr and Quiel as the owners of the bank accounts. They then went ahead and deposited millions in these secret foreign bank accounts from sale of stock they had concealed their ownership in acquiring. All this while, Rusch acted as a signatory authority to these secret accounts. He carried out all the transactions on these accounts on behalf of Kerr and Quiel.

The Role of the Attorney

Rusch, focused on criminal and civil tax defense, creating and maintaining offshore accounts among other things. He was a master in setting up these offshore accounts and was not left out in using them too. He also maintained secret foreign bank accounts in Switzerland and Panama. He went against the statement “preach water and drink wine.” He actually preached the water and drank it, or how else can you convince clients to hide money in secret foreign bank accounts.  At one point, he helped Kerr to purchase a golf course in Colorado from his secret accounts. He actually did this using his nominee Panamanian entity. As if that was not enough, he helped Kerr and Queil to use the hidden money in the secret foreign bank accounts at their comfort back in the U.S. by transferring funds to them through his client trust account.

Charges

You cannot hide from the law for so long.  Rusch was sure they will never be found or may be the deal he got from this two business men was too sweet to be ignored.  Either way, he was at the center of breaking the law by aiding money laundering and in the promoting tax evasion. IRS and the government proved too smart to be outsmarted when they caught up with the three.

 Kerr and Queil were each convicted of two counts of filing false individual tax returns for 2007 and 2008. In addition, Kerr was charged with failing to file FBARs (Report of Foreign Bank and Financial Accounts) for 2007 and 2008.  Rusch, pleaded guilty to conspiracy to defraud the government and failing to file an FBAR.

In case you have found yourself in the above situation, contact us for help. It is getting hard to run from the law with the IRS intensifying its search on these secret foreign bank accounts.

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FBAR Case on United States v. Carl Zwerner settled for $1.8 Million

FBAR Case: United States vs. Carl Zwerner is settled for $1.8 Million

The IRS U.S. Court building in Washington DC, a courthouse where cases on the Trust Fund Recover Penalty (TFRP) are held

The United States v Carl Zwerner FBAR case has been finally settled despite the many speculations regarding the Eighth Amendment rights. Carl Zwerner has entered a settlement agreement with the U.S. Department of Justice contrary to what most tax practitioners and attorneys thought. “Mr. Zwerner believed that a settlement at this time was in his best interests,” Press told Bloomberg BNA. “The Eighth Amendment issue will have to be litigated at some future date by others. We were fully prepared to litigate that issue.” This settlement agreement therefore finally closes the case of United States v. Zwerner.

Background

Zwerner opened an account in Switzerland in the 1960s, under the name of two different foundations he created. He used the proceeds of the account for personal expenses. Zwerner failed to report his financial interest in the Swiss bank account on an FBAR and also failed to report any income earned from the Swiss bank account on his original tax returns for 2004 to 2007.  He represented on Schedule B of his original tax returns for those years that he did not have an interest in a foreign financial account by answering “no” in response to question 7(a). Check here for more details on the case.

The Tax Law

U.S. District Court for the Southern District of Florida jury scrutinized the evidence and found that Zwerner knew of his obligation to file FBARs. According to the jury, Zwerner’s failure to file FBARs for the years 2004 through 2006 was willful. See (U.S. v. Carl Zwerner, Civil Docket Case #1:13-cv-22082-CMA). The balance of the account for each of the years at issue exceeded $1.4 million and Zwerner committed FBAR violations by not complying with the law as required by 31 U.S.C. § 5314 and its implementing regulations. The law requires that U.S. citizens who have an interest in or signature authority over, a financial account overseas are required to disclose the existence of such account on Schedule B, Part III of their individual income tax return. Additionally, U.S. citizens must file an FBAR with the U.S. Treasury disclosing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest, or over which they have signatory or other authority. Those who willfully fail to file their FBARs on a timely basis, due on or before June 30 of the following year, can be assessed a penalty of up to 50 percent of the balance in the unreported bank account for each year they fail to file a required FBAR.

Settlement

The FBAR Case on United States v. Carl Zwerner was finally settled for $1.8 Million. Zwerner agreed to pay about $1.8 million in penalties and interest to settle the case.

The penalties Zwerner will pay for failure to file the FBAR include; $723,762 for 2004 and $745,209 for 2005. Zwerner also agreed to pay the U.S. interest of $21,336.11 for the 2004 failure and $20,947.52 for the 2005 failure. In addition, he will pay statutory penalties of $128,016.64 for 2004 and $125,685.11 for 2005.

The defendant agreed to make all of these payments by Sept. 2. Once the payment is made, the parties will stipulate to dismiss the action with prejudice, according to the court document. Check here for more information.  Zwerner’s attorney, Martin Press, told Bloomberg BNA on June 10 that the final settlement was less than half of the amount originally sought by the government for the four-year period. Press said it was his client’s decision to settle the case. “The government is looking at multiple FBAR penalties and will increase the assertion of multiple FBAR penalties in the future,” Press said. “And this may apply to both civil cases and criminal cases. I believe this is an initiative by the Justice Department to assert penalties in more than one year.”

FBAR Case on United States v. Carl Zwerner is just an eye opener to U.S. Citizens and Residents with foreign financial accounts that are not reported.

“As this jury verdict shows the cost of not coming forward and fully disclosing a secret Offshore bank account to the IRS can be quite high,” said Assistant Attorney General Kathryn Keneally for the Justice Department’s Tax Division. She added that “Those who still think they can hide their assets offshore need to rethink their strategy,” http://www.woodllp.com/Publications/Articles/pdf/Zwerner.pdf.

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IRS Deadline for U.S. Citizens and Resident Aliens Abroad

IRS Expectations of U.S. Citizens and Resident Aliens Abroad

IRS  (Internal Revenue Service) in one of its news releases has reminded U.S. citizens and resident aliens abroad of the deadline on their tax obligations. According to the IRS, U.S Citizens and permanent residents who lived or worked abroad in 2013 in full or in part may have a U.S. tax liability and a filing requirement in 2014. The filing deadline is Monday, June 16, 2014, for U.S. citizens and resident aliens living overseas including those serving in the military abroad.

IRS has provided a filing deadline of June 16 to U.S. Citizens and alien residents. To cater for tax payers residing overseas who cannot meet this deadline, IRS has provided an automatic extension to Oct. 15, 2014 to the taxpayers. However, it is important to note that the extension by the IRS is on time to file and not time to pay. An interest rate interest rate of 3% p.a. is compounded daily applies to any payment made after April 15, 2014. In some cases, a late payment penalty, usually 0.5 percent per month applies to payments made after June 16, 2014.

Federal Law takes on IRS tax obligationa abroad

U.S. citizens and resident aliens living abroad are required by Federal law to report any worldwide income, including income from foreign trusts and foreign bank and securities accounts on their federal income tax return. The IRS requires the affected taxpayers to fill out and attach Schedule B to their tax return. Certain taxpayers may also have to fill out and attach to their tax return Form 8938 (statement showing their financial assets abroad). U.S. Citizens and resident aliens with foreign accounts whose aggregate value exceeded $10,000 at any time during 2013 should these accounts. IRS requires tem to file Form 114 electronically with the Treasury Department. This is known as Reporting of Foreign Bank and Financial Accounts (FBAR). For more information on how to file the FBAR, click here.

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