Florida Widow Guilty + $21M Penalty For Inherited Swiss + Liechtenstein Accounts Her penalty? 50% of the highest balance: $21,666,929, and that’s not all. She has not yet been sentenced but faces a potential prison term up to six years. The IRS and DOJ have more and more resources at their disposal and urge taxpayers to address compliance failures before it’s too late. See 10 IRS Rules For Stress-Free Foreign Accounts. Disclosure and finite penalties are vastly better, especially when discovery by the IRS is more and more likely. Merely closing a foreign bank account does not solve disclosure problems. See Is Closing Foreign Bank Accounts An Alternative To Disclosure? Remember these key rules: Reporting. You must report worldwide income on your U.S. income tax return. If you have an interest in a foreign bank or financial account you must check “yes” on Schedule B. FBARs Too. All U.S. persons with foreign bank accounts exceeding $10,000 at any time during the year must file an FBAR by each June 30. See Primer For First Time FBAR Filers. FATCA Form. You may also need to file an IRS Form 8938 to report your foreign accounts and assets. See IRS Form 8938 Or FBAR? and More On IRS Form 8938 vs. FBAR. Big Penalties. Failures can be tax evasion and fraud. Plus, the penalty for failing to file an FBAR is $10,000 for each non-willful violation. If willful, the penalty is the greater of $100,000 or 50% of the account balance for each violation. See Despite FATCA, FBAR Penalties Still Under Fire. Prison. Tax evasion can carry a prison term up to five years and a fine up to $250,000. Filing a false return can mean up to three years in prison and a fine up to $250,000. Failing to file FBARs can carry penalties up to $500,000 and prison up to ten years. See IRS May Find “Innocent” FBAR Violation Willful. forbes/sites/robertwood/2013/01/08/florida-widow-guilty-21m-penalty-for-inherited-swiss-liechtenstein-accounts/
Posted on: Tue, 22 Oct 2013 18:34:50 +0000
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