Florida Criminal Lawyer Blog

As Fort Lauderdale tax evasion criminal defense attorneys, we have been following media coverage of the IRS lawsuit against UBS, and the amnesty program for UBS accountholders who may have committed tax fraud, with interest. That’s why we were intrigued to read in the Wall Street Journal July 20 that the Internal Revenue Service has begun to look beyond accountholders at UBS to find tax evaders. According to the newspaper, the IRS is now stepping up enforcement of an existing rule requiring people with $10,000 or more in any foreign account -- no matter where it’s located -- to report any income they make from that account. That includes foreign companies, mutual funds, retirement accounts and even trusts to which the taxpayer is a beneficiary, as well as ordinary savings accounts.

These accountholders are being asked to come forward under the same voluntary disclosure program applied to UBS accountholders. In this program, people who have failed to declare income from foreign accounts can avoid heavy fines and potential prison time, in exchange for full disclosure of their assets and payment of back taxes and penalties. People participating in this program have until Sept. 23 -- which is now just under two months -- to file a form called the Foreign Bank Account Report or face penalties. For people the IRS believes simply made a mistake, those penalties include $10,000 for every year they failed to report income. For people accused of intentionally trying to avoid paying their taxes, the fine could be the greater of $100,000 or half the value of the account, per year.

As steep as those penalties sound, they are a drop in the bucket compared to the price of not coming forward, the Journal wrote. According to a statement from the IRS, a taxpayer with a $1 million account generating $50,000 a year in income over the past six years would pay $386,000 under the voluntary disclosure program. However, the same taxpayer could pay up to $2.3 million in taxes and penalties and face time in prison if he or she is caught by the IRS. Because the requirement to file is triggered even when the value of the account is only briefly over $10,000, tax attorneys and accountants expect the number of FBAR filings to soar this year, as accountholders make the extra effort to protect themselves from these high fines.

As Sarasota tax evasion criminal defense attorneys, we were particularly interested in the report that the IRS is conducting in-person interviews with many taxpayers who come forward under the voluntary disclosure program. According to the newspaper, one of the goals of this interview is to learn who promotes offshore accounts. Taxpayers may have an attorney for this process -- and under these circumstances, Balliro, Galasso, Leskovich & Seltzer can’t recommend it highly enough. In addition to helping clients disclose their accounts correctly and completely, and negotiating the best deal possible with the IRS, our Miami tax evasion defense lawyers can also protect them from IRS overreaching or their own nervousness during these stressful and difficult interviews.