Florida Criminal Lawyer Blog

Our West Palm Beach tax fraud criminal defense attorneys were extremely interested in a Feb. 21 Miami Herald article about an unusual tax fraud scheme. According to the article, inmates at the Monroe County Jail near Key West ran a large-scale tax fraud scheme netting nearly $1 million in bogus refunds. The participants were not in jail for tax fraud, and in most cases have moved on to prison for unrelated crimes since the crimes were uncovered nearly three years ago. But while they were in jail, about 50 inmates were able to claim refunds for taxes they never paid, “automatically deducted” from paychecks that never existed. The article says this is a growing problem in jails and prisons around the nation.

Investigators say two inmates served as ringleaders in the schemes, and even charged other inmates for information on how it worked. Shawn Clarke and Danilo Suarez filed 1040EZ forms along with Form 4852, which is a self-reported substitute for a W-2. Participants fabricated their information, claiming to have worked for companies that don’t really exist, sometimes while they were in jail. Some filed multiple returns despite having never before filed tax returns, claiming an average of about $5,000 in returns. Jail officials uncovered the scheme in late 2006 when they found a written document in a cell, and handed the IRS a case complete with confessions and recordings of incriminating phone calls. Local officials complain that the federal government has delayed the case for years, bringing evidence before a grand jury only this month.

As Miami tax fraud criminal defense lawyers, we’re pleased that the federal government is prosecuting this well-documented case. (However, we’d like to note that jailhouse confessions are unreliable, because prisoners can be under duress.) But if authorities start seriously pursing tax fraud from jails and prisons, we’re concerned that inmates who make honest mistakes may get swept up in the investigations. The article notes that some of the inmates in this case had never filed tax returns before. The tax code is notoriously complicated and confusing; it must be even more confusing for those with no past tax experience, some of whom may never have held a legal job. Such inmates may also honestly rely on bad advice from people like Clarke and Suarez. It would be a shame to criminally prosecute such a person for trying to do the right thing.

Continue reading "Investigation Finds Key West Inmates Filed False Tax Returns From Jail" »

Our Miami-Dade tax evasion criminal defense lawyers were very interested in the IRS investigation of Swiss bank UBS and its clients who are American taxpayers. That case is nearly settled, although a recent Swiss ruling may stymie matters. However, clients of at least one other bank got an unpleasant surprise recently when the New York Times ran a piece about a whistleblower at another Swiss bank, the privacy-focused Julius Baer. The newspaper reported Jan. 19 that Rudolf M. Elmer, a former Julius Baer employee, began meeting with tax authorities last week to disclose information he says shows that his ex-employer and numerous American banks knowingly helped Americans hide their assets from the IRS.

Elmer worked for Julius Baer for 15 years in Switzerland and another eight years as the COO of a branch in Grand Cayman, a Caribbean island. He claims that he discovered evidence of tax evasion in 2002, the same year he was dismissed from his job. Specifically, Elmer claims to have documents showing that American investment companies steered clients who wanted to avoid taxes to Julius Baer. The Swiss bank, in turn, backdated documents establishing tax shelters and funneled high-value transactions for American investment firms through the bank’s Caribbean entities, where they could avoid U.S. taxes. His attorney said this information helps confirm information the IRS has already recovered through its voluntary disclosure program, although the IRS declined to confirm this. The IRS did say that it is investigating banks other than UBS.

Julius Baer claims Elmer is a disgruntled former employee seeking revenge for losing a promotion, his dismissal and what he perceives as an insufficient financial settlement. It also said he stole documents while at the bank, and that he has forged documents in order to trump up evidence against the bank and its clients. Swiss authorities are investigating the stolen-documents claims, but Elmer was already jailed briefly, in 2005, for breaking Swiss banking secrecy laws. In fact, each side accuses the other of borderline violence.

As West Palm Beach tax fraud defense attorneys, we will watch the IRS closely this year to see whether it pursues a case against Julius Baer clients who pay taxes in the United States. If Elmer’s claims are true, many very wealthy individuals who were not involved with UBS will now have to face the possibility of audits, investigation and criminal charges. To make matters worse, the IRS no longer offers its special voluntary disclosure program, which gave lenience and lower fines to taxpayers who come clean and share information with the government. The agency does offer a normal voluntary disclosure program, but the special rules from last year do not apply. That’s why it’s even more important now for taxpayers considering a disclosure to get help from an experienced tax crimes defense lawyer

Continue reading "Swiss Bank Whistleblower Exposes More American Clients to Tax Evasion Charges" »

Our Fort Myers tax evasion criminal defense lawyers have closely followed the voluntary disclosure program offered by the IRS throughout 2009, because we offer aggressive legal defense for taxpayers in just that situation. The voluntary disclosure program allowed taxpayers who failed to declare income from overseas accounts to come forward with that information, in exchange for reduced penalties and very little chance of prison time. That was particularly important because the IRS was also in negotiations with Swiss bank UBS for most of the year to learn the names of U.S. taxpayers that the bank had admittedly helped to evade their taxes. The voluntary disclosure program ended Oct. 15, and according to a Nov. 17 article from the Associated Press, it saw unprecedented participation from a total of more than 14,700 taxpayers.

However, UBS still intends to turn over names of 4,450 more accountholders as part of its legal settlement with the federal government. And UBS accountholders are far from the only overseas accountholders likely to be affected by the ongoing IRS crackdown on tax evasion. Our West Palm Beach tax evasion criminal defense lawyers can still represent these clients in negotiations with the IRS -- or, if it comes to this, in tax court. If you're in this situation or think you might be and you'd like to learn more, don't wait to call Balliro, Galasso, Leskovich & Seltzer for a free consultation. You can reach us toll-free from anywhere in Florida at 1-866-ARRESTED or contact us through our Web site.

Our Fort Myers tax evasion criminal defense attorneys were surprised and pleased to see that the Internal Revenue Service has extended the deadline for its voluntary disclosure program. According to the New York Times, the agency announced Sept. 21 that it will extend the program, scheduled to end Sept. 23, an additional 22 days to Oct. 15. The move comes after taxpayers have flooded the agency with voluntary disclosures, which allow taxpayers who failed to report income from overseas accounts to avoid criminal prosecution and punishing fines. These taxpayers must still pay back taxes and penalties of five to 20 percent of the unreported income, but by coming forward, they can avoid much higher fines, a criminal record and potential prison time.

The voluntary disclosure program grows out of an IRS criminal investigation of the Swiss bank UBS. A former employee revealed that the bank had taken active steps to help Americans avoid reporting income from UBS accounts, including physically carrying money in luggage and setting up elaborate shell corporations. As part of the settlement of those charges, UBS agreed to release names of some taxpayers who had not reported the income from their accounts to the IRS; after the IRS sued, it revealed even more names. The agency publicly promised that it would be aggressive in its efforts to find and prosecute tax evasion -- but it also instituted its voluntary disclosure program, allowing taxpayers to avoid harsh penalties by coming forward.

By all accounts, the voluntary disclosure program is a success. According to the Times, 3,000 people (including people without UBS accounts) have participated so far this year, up dramatically from a total of 80 participants in 2008. The deadline’s extension is one sign of the program’s success, and as West Palm Beach tax evasion defense lawyers, we strongly encourage any taxpayers who could benefit from the program to talk to us about doing so. In addition to helping clients with the necessary paperwork for the disclosure, our Sarasota tax evasion criminal defense lawyers aggressively negotiate for fair and lenient penalties; represent clients in any in-person interview the IRS requests; and guide clients about what must be disclosed now and in the future. However, because the extended deadline is so soon, taxpayers must move very quickly to take advantage of the program.

Continue reading "IRS Extends Deadline for Voluntary Disclosure of Unreported Overseas Income in UBS Case" »

As Fort Myers tax evasion criminal defense lawyers, we have watched the federal government’s lawsuit against Swiss bank UBS very closely. The federal government sued UBS, one of the largest Swiss banks in a country known for its banking privacy laws, after reaching a settlement in a related criminal case in which UBS admitted to helping Americans evade their taxes. In the newer suit, the IRS sought the names of thousands of U.S. taxpayers with accounts at UBS, in order to ferret out possible tax crimes. As we wrote earlier this week, that case has finally settled -- and this week, the parties said UBS will disclosed 4,450 names of American taxpayers as part of the settlement.

The 4,450 names are less than 10% of the 52,000 names originally sought by the IRS. However, the exact criteria for deciding which names will be disclosed have not yet been released. And observers expect the federal government to continue its aggressive efforts to stamp out tax fraud by prosecuting all of these taxpayers, if it believes have committed tax crimes.

In response, Bloomberg News reported Aug. 21, American taxpayers with UBS accounts are rushing to disclose the existence of their accounts to the federal government before the government can come to them. For five months, the IRS has offered taxpayers a kind of amnesty through a voluntary disclosure program, in which taxpayers admit the existence of these accounts in exchange for lighter tax penalties and no recommendation for criminal prosecution. Taxpayers must still pay taxes owed, interest and 20% of the value of the account at its highest value -- but by doing so, they avoid facing up to five years in prison and 50% of the value of the account for every year they failed to disclose the account.

Tax evasion criminal defense lawyers in Miami and around the world report a flood of calls from taxpayers who want to take advantage of this program. In fact, Bloomberg said, attorneys reported hearing from many more clients after the settlement was announced. That’s on top of the already-record number of people taking advantage of the voluntary disclosure program. The IRS said it has about 500 people a week entering the program -- up from fewer than 100 in all of 2008. They may also feel a special urgency because the program is slated to end on Sept. 23 -- about a month. But according to one tax lawyer interviewed for the article, calls from clients increased substantially after the settlement was announced, perhaps suggesting that the 4,450 names pushed some fence-sitting taxpayers into action. Another attorney said anyone who doesn’t use the voluntary disclosure program is “taking a major gamble” that their name won’t be on that list.

Our West Palm Beach tax fraud criminal defense attorneys agree. Without knowing what criteria UBS will use to choose those names, taxpayers have no idea whether they will be investigated. As we’ve written before, UBS has admitted to actually advising its clients to break U.S. tax laws and helping them to do it, which suggests that even people with no bad intentions may have unwittingly committed tax crimes. If there is even a chance of being named as a tax evader, we believe it’s much better to step forth and pay the penalty than to face the possibility of prison. Previous news reports said the IRS has been lenient with taxpayers who never intended to hide their income, but made an honest mistake. By contrast, the agency is not kind to acknowledged tax evaders. In fact, a former UBS employee who cooperated with the IRS recently was sentenced to 40 months (three years and four months) in prison.

Continue reading "Tax Evasion Defense Attorneys See Flood of U.S. Taxpayers After UBS Settlement Releases More Names" »

The federal government and Swiss bank UBS reached a long-awaited settlement last week, the Associated Press reported Aug. 15. The IRS sued UBS for withholding names of 52,000 American taxpayers who it believes are hiding assets in UBS accounts to avoid taxation. They reached a settlement in that contentious case Aug. 12. Details of the settlement have not yet been released, the article said -- but U.S. taxpayers who believe they may be charged with tax crimes as a result of the settlement are hurrying to come clean first.

These taxpayers are taking advantage of a voluntary disclosure program announced by the IRS in March. During the six months ending Sept. 23, taxpayers who have undeclared assets with UBS or another overseas bank may voluntarily disclose the existence of that money. They will have to pay back taxes and penalties, but in exchange for their honesty, they can avoid the more severe penalties and potential prison time they would face in a federal prosecution for tax evasion. As our Miami tax evasion criminal defense lawyers have written on this blog before, those penalties can be severe -- up to five years in prison and up to 50% of the value of undeclared assets for each year they failed to disclose those assets.

Even before a settlement had been reached, tax evasion defense attorneys in South Florida and elsewhere reported a sharp increase in the number of clients asking for help with a voluntary disclosure. The IRS won’t disclose the total number of applicants, but did say that the agency saw 400 applicants in just one week this July, up from a total of fewer than 100 applicants in all of 2008. One attorney interviewed for the piece said he didn’t think taxpayers had much of a choice, because the enforcement situation has been permanently changed. Another person in the article, a tax advisor, said his clients get far better outcomes when they display “good faith” to the IRS -- and that includes voluntarily coming forward before the agency can charge them with federal tax crimes.

Balliro, Galasso, Leskovich & Seltzer has an active practice helping UBS accountholders and others take advantage of this voluntary disclosure program. Taxpayers may represent themselves during this process, but there are substantial and important advantages to getting advice from an experienced attorney. Our West Palm Beach tax evasion criminal defense attorneys help clients determine their eligibility; advise them about what must be disclosed; and represent them at interviews with the IRS, which can be stressful as well as legally troublesome. And of course, we will negotiate aggressively on clients’ behalf to get them the best and fairest possible outcome -- one that takes into account their good-faith disclosures and extenuating circumstances.

Continue reading "UBS Settlement Spurs Americans to Disclose Tax Problems Before Possible Prosecution" »

In a last-minute deal that stopped hearings set to begin today, the Internal Revenue Service and Swiss bank UBS have reached an agreement, Bloomberg News reported July 31. The agreement may end a lawsuit the IRS filed against UBS to compel it to reveal names of 52,000 Americans with accounts there. No details were provided, but the settlement will be submitted in writing this Friday, August 7, and our Miami-Dade tax evasion defense attorneys will be watching closely.

The government sued to identify Americans who have been avoiding taxes by hiding assets in UBS accounts, something UBS has already admitted to helping facilitate. The lawsuit was filed shortly after UBS deferred prosecution for helping Americans evade their taxes, paying $780 million and revealing 250 names. The IRS wants 52,000 more names, which UBS and the Swiss government contend would violate Swiss law. The lawsuit seeks to establish whether the UBS deferred-prosecution agreement compels it to hand over the larger list of names. Secretary of State Hillary Clinton is meeting today with the Swiss Foreign Minister, Micheline Calmy-Rey, to discuss the situation.

Since UBS identified the original 250 names, at least three American UBS clients have been prosecuted for tax evasion. In anticipation of learning the names of thousands more, the IRS is offering a voluntary amnesty program for all U.S. taxpayers who have overseas assets they have not declared on their taxes, including assets at banks other than UBS. Under the amnesty program, taxpayers come forward to reveal their assets -- frequently with the help of a West Palm Beach tax evasion defense lawyer -- in exchange for lighter penalties. Participating taxpayers must still pay back taxes and penalties, but they face much smaller fines and no possibility of prison time. By contrast, if they fail to come forward, these people face up to five years in prison and a fine of $100,000 or 50% of the account’s value -- for each year they failed to declare assets.

According to another article by Bloomberg, taxpayers are rushing to take advantage of this program before its Sept. 23 deadline. The IRS said it received 400 voluntary disclosure applications in one week in July, which is four times the number of voluntary disclosures in all of 2008. To make the process more efficient, it has released a list of information it would like from disclosing taxpayers, including account numbers and information on any audits. As we noted last week, they are also summoning many taxpayers for in-person interviews that may be an attempt to find out who is advertising these accounts.

Taxpayers may have a Naples tax evasion criminal defense attorney represent them throughout this process, and Balliro, Galasso, Leskovich & Seltzer recommends it highly. BGL&S represents taxpayers throughout Florida who are ready to make these voluntary disclosures and avoid serious penalties. We can help taxpayers establish eligibility and meet the basic requirements; represent them during any difficult in-person interview or audit; and make sure their rights are respected during the process. As the Bloomberg article notes, penalties are generally lower for families of Jewish people who fled the Holocaust; they should also be lower for those who genuinely thought they didn’t have to report their assets. Our Fort Lauderdale tax evasion criminal defense lawyers will ensure that the IRS understands and respects circumstances like these.

Continue reading "UBS Reaches Deal in Tax Evasion Lawsuit to Reveal Names of American Accountholders to IRS" »

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.

Continue reading "IRS Looks Beyond UBS Clients to Search for Tax Evasion in Overseas Bank Accounts" »