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Tag Archive for Tax Crimes

Recklessness = Willful Failure To File FBAR

Ron Marini

A district court has found that the taxpayers’ failure to timely file a Foreign Bank and Financial Accounts Report (FBAR) was willful where, among other things, they stopped employing a bookkeeper or keeping any books after opening a foreign bank account and made several misrepresentations under penalty of perjury when they applied to participate in IRS’s Offshore Voluntary Disclosure Program (OVDP).

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Ex-Swiss Banker Heads To Trial For Conspiracy To Evade Taxes

Ron Marini

We posted 144 Offshore Banks & Now Financial Advisors Are Turning Over Your Names To The IRS where we discussed the Government has added 47 more banks and financial advisors to this list bringing the number to 144 total banks and foreign financial advisors. Included in this list as #137 is Stefan Buck (effective 11/15/16).

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Bank Secrecy, Exchange of Taxpayer Data, Search, And EU Law: The Case Of K.S. And M.S. v. GERMANY

William Byrnes

In 2006, the German secret service (Bundesnachrichtendienst) bought a data carrier from a certain K. for a considerable amount of money. The data carrier contained financial data from the Liechtenstein L. Bank relating to 800 people. K., who had formerly been an employee of the L. Bank, had illegally copied the data. The data carrier was submitted to the German tax investigation authorities, which subsequently instigated proceedings against, inter alia, the applicants, in relation to tax evasion crimes.

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Facing The Music

When I was a young, fresh-faced criminal defense attorney, there was an aged judge on one of the local benches. Courthouse rumor persisted that this gentleman, whose name I cannot recall, was a finalist to serve as Alf Landon’s running mate in 1936. The judge would occasionally say that his particular fiefdom should be called “County Dumb Court” instead of “County Criminal Court.” While his rhetoric was a bit overblown, at least in my humble opinion, his underlying point was valid. Almost all the defendants who approached the bench were there not because they had done something malicious, but because they had made a poor decision under pressure, misunderstood the law or been trapped on a technicality.

In a way, tax court is much the same. The petitioners are certainly not “dumb” in any way, Read more

DOJ Continues To Prosecute Offshore Bankers Who Have Aided Taxpayers To Avoid US Taxes!

Bloomberg News reports that federal prosecutors in Manhattan filed an expanded indictment Wednesday against former Wegelin & Co. bankers Roger Keller, Urs Frei and Michael Berlinka.

On Wednesday, August 28, 2013 we posted U.S. Turns Up The Pressure On Swiss Banks! where we discussed that thousands of Swiss bank workers have seen their data handed over to justice authorities in the United States and are now living with a considerable amount of uncertainty.

Now three Swiss bankers accused in 2012 of helping Americans hide more than $1.2 billion from the U.S. Internal Revenue Service face new charges of obstructing the Read more

Man Convicted of Threatening To Assault And Kill IRS Agent And Torture The Agent’s Family Over Audit Proceedings

While death and taxes are always certain, take lesson from Andrew A. Calcione that you should never mix them together.

In May 2014, a federal judge found 49-year-old Andrew A. Calcione of Cranston, Rhode Island, guilty of threatening to assault an IRS Revenue Agent, rape and kill the agent’s wife and injure the agent’s daughter while the agent watched before murdering the agent. The reason? Mr. Calcione didn’t want to pay his tax bill of $330,000.

According to government testimony as reported in United States of America v. Andrew A. Calcione, U.S. District Court for the District of Rhode Island (Providence County), Case No. 1:13-mj-00291-LDA, Mr. Calcione was selected for audit for the years 2008, 2009 Read more

Walking The Sawdust Trail

Those who responded to the altar call after one of Billy Sunday’s sermons (see video below) were said to walk the sawdust trail, because the temporary venues he preached in back in the 1910s and 1920s often had sawdust on the floor as a deodorizer.

Before he became a travelling evangelist, and possibly even before he became a Christian, depending on what source you believe, Mr. Sunday played eight seasons of Major League Baseball between 1883 and 1890. During that time, he roamed the outfield for the Chicago White Stockings, Pittsburgh Alleghenys and Philadelphia Phillies. Mr. Sunday left the game with a lifetime .248 batting average, which was pretty good for the pre-modern era. He was also a speedy player who finished in the top ten in stolen bases three times and led the league in outfield putouts in 1888. Read more

Is the Justification for the United States’ System of Worldwide Taxation A Hoax? – Part II

In Part I, I argued that the benefits rationale – in terms of the public benefits received by citizens – was an unpersuasive justification for the U.S.’s system of worldwide taxation.

I continue my rant in Part II, examining the practical effects of worldwide taxation on non-resident U.S. citizens. Through a labyrinth of “credits, deductions, exclusions, and non-deductibility,” the Internal Revenue Code treats similarly situated U.S. citizens who live abroad differently. How so? Such persons pay different U.S. taxes depending upon the types and amounts of the taxes imposed by the countries in which they live.

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How To Avoid Becoming The Next “Cooked Goose” Gracing The IRS’s Offshore Tax Evasion Table This Thanksgiving – Part III

III. Shorthand Formula for a Criminal Offshore Bank Account Tax Case

At the end of the day, an offshore account tax fraud case comes down to proving two key elements:

(1) A substantial tax deficiency, and

(2) Badges of fraud (i.e., acts of concealment concerning the non-reporting of the offshore bank account).

The larger the tax deficiency and the more badges of fraud it can prove, the stronger the government’s case becomes. Read more

How To Avoid Becoming The Next “Cooked Goose” Gracing The IRS’s Offshore Tax Evasion Table This Thanksgiving – Part II

II. Essential Elements of Tax Crimes

a. Willfulness

One small word is all that distinguishes a civil tax matter from a criminal tax matter. That pestilent word is called “willfulness.” It is the cornerstone to any criminal tax matter.

In the criminal setting, the government carries the heavy burden of proving – beyond a reasonable doubt – that the taxpayer acted willfully. Willfulness is defined as an “intentional violation of a known legal duty.”

i. Proving Willfulness For Purposes of the Crime of Failure to File a FBAR Read more

How To Avoid Becoming The Next “Cooked Goose” Gracing The IRS’s Offshore Tax Evasion Table This Thanksgiving – Part I

If your name was mentioned in the same sentence as Raoul Weil, Carl Zwerner, or Ty Warner, you can rest assured that you haven’t been nominated for an academy award or a Pulitzer Prize. Nor did you win the Publisher’s Clearinghouse Award. Instead, you’d have joined a disgraced group of taxpayers who have had the misfortune of being targeted by the U.S. government in their crusade to stamp out offshore tax evasion.

In stark comparison is John Doe, a conflicted taxpayer who recently entered the Offshore Voluntary Disclosure Program (OVDP). Neighbors and friends who run into John are a captive audience for him as he wallows in his self-pity. John regrets the decision to enter OVDP and tells his tale of woe to anyone who will listen: “I don’t know what I’m doing in this program. I know 500 people with foreign accounts like mine, and they’re not coming Read more

Tax Court Affirms Net-Worth Method Used to Support Fraud Determination Against Surf Shop Owners

If you think that by keeping sloppy records, the IRS cannot determine how much income you earned – think again.

The Worth family, Donald, Marie, and their son, Frank, operated a chain of seven surf and skateboard shops across California, called White Sands. Their business was selected for audit by the IRS. In the course of the audit the IRS learned that Frank was responsible for about half of the stores and Donald and Marie operated the other half. Marie also managed the books and prepared tax returns. As manager of the heavily cash-based business, Frank had the authority to write checks on certain White Sands bank accounts, wrote checks or used cash to pay vendors for merchandise as it came in, and wrote checks to reimburse himself for business expenses he paid. Frank also supervised Read more

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