An 83-year-old Florida man pleaded guilty this week to hiding at least $1.1 million from the IRS in secret Swiss and Israeli bank accounts for over a quarter century.

Bernard Kramer held the secret accounts from 1987 to about 2012. He used the code phrase “Hot Lips” when referring to them in conversations with Swiss bankers in Zurich according to a criminal filing in Manhattan federal court.

Mr. Kramer pleaded guilty to one count of conspiracy and one count of tax perjury. As a condition of his plea agreement, Mr. Kramer agreed to cooperate with government investigators and to pay a civil penalty in the amount of $588,042 along with past due taxes. He potentially faces a maximum eight-year prison term — five years for conspiracy Read More

iStock_tax evasionXSmallCertain findings and recommendations by the Government Accountability Office (GAO) about offshore tax evasion and the IRS efforts to combat it have many taxpayers worried. The GAO is an independent, nonpartisan agency that works for Congress and is often referred to as the “congressional watchdog.” It investigates how the federal government spends taxpayer dollars and makes recommendations as to how a governmental agency can be more efficient and effective.

Recently issued GAO report, Offshore Tax Evasion: IRS Has Collected Billions of Dollars, but May be Missing Continued Evasion, provides key information about the IRS’ offshore voluntary disclosure initiatives. More importantly, however, GAO indicates its review of IRS data shows that the IRS is missing what appear to be rampant “quiet disclosure” and “new account” filings.

“Quiet Disclosures” / “New Account” Filings

With a “quiet disclosure”, taxpayers quietly amend past tax returns and FBARs reporting previously unreported income and accounts. With “new account” filings, taxpayers report the existence of any offshore accounts as well as income from the accounts on the current year tax return, without amending any prior years’ returns. They often also disclose the existence of the accounts by filing FBARs for the current calendar year making it appear as if the account was just newly opened.

GAO takes the IRS to task for not finding enough “quiet disclosures” and “new account” filings which lose billions of Read More