Tax Court in Brief | Estate of Clemons v. Comm’r | Dangers of FBAR, Accuracy-Related Penalties, and Foreign Assets
Estate of Clemons v. Comm’r, T.C. Memo. 2022-95| September 16, 2022 | Buch, J. | Dkt. No. 25029-16
Short Summary: Brett Clemons (Clemons) was a successful computer programmer and owned various computer programming businesses. In 2001, he opened a Swiss bank “numbered” account. However, he hid the transfer and existence of the foreign account from his then-wife because he intended to divorce her. When opening his foreign account, he acknowledged his U.S. tax liability in opening documents and requested that the Swiss bank account hold his mail. After the bank account was opened, he used it to deposit significant funds and to make investments overseas.
Clemons prepared and filed his own income tax returns. For 2003 through 2007, he did not report all of his earnings from his computer programming business, and he did not report investment gains from his investments overseas. He also did not disclose foreign accounts on Schedule B of his returns, nor did he file FBARs each year.