Articles Posted in FBAR Violations

Swiss Banker Pleads Guilty to Defrauding the United States with Tax Scheme
A former employee of Credit Suisse bank has pleaded guilty to conspiring to defraud the United States. Susanne D. Rüegg Meier admitted to a tax scheme that allowed U.S. taxpayers to hide their assets in Swiss bank accounts. The plea agreement states that Credit Suisse went to great lengths to assist their clients in evading their U.S. tax obligations, including reporting their foreign income on their tax return and filing accurate FBARs.

Some components of the scheme include the following:

  • all mail related to the accounts were retained in Switzerland

California Resident Indicted for Hiding Foreign Accounts
A Beverly Hills resident has been indicted on several charges for failing to disclose foreign accounts and then allegedly lying to the IRS Criminal Investigation (CI) unit. The charges faced by Teymour Khoubian include the following:

  • corruptly endeavoring to impede the internal revenue laws
  • filing false tax returns

Considerations When Submitting Delinquent International Information Returns
The IRS procedure for submitting delinquent international information returns such as Forms 3520, 3520A, Form 5471, or Form 8938,  along with a reasonable cause statement is one of four options the IRS allows for taxpayers wish to come into compliance with their offshore filing requirements. This procedure has some benefits over the Offshore Voluntary Disclosure Program (OVDP) and the Streamlined Filing Procedures, but it also has its drawbacks.

The main benefit is that if the IRS accepts your reasonable cause statement and submission of delinquent international information returns, you will have all penalties waived. Both the OVDP and the Streamlined Procedures (at least for domestic taxpayers) involve paying penalties, with the OVDP requiring much higher penalties and eight years of tax returns.

The drawback is that if your reasonable cause statement is rejected, you may be responsible for the full amount of the international reporting forms penalties.