My quick take? The IRS was so hungry for an FBAR criminal conviction that it agreed to a plea deal with no jail time, even when the underlying tax evasion charge normally carries a year incarceration. Great result for Defendant (and counsel); great result for the IRS as they got headlines during their push for the OffShore Voluntary Disclosure (OVDI).
Here's the press release:
NEW JERSEY UBS CLIENT SENTENCED FOR FAILING TO REPORT MORE THAN $1 MILLION IN SWISS BANK ACCOUNT
TUESDAY, MAY 24, 2011
NEWARK, N.J. — An Oradell, N.J., man was sentenced today to three years of probation — including 12 months of home confinement with electronic monitoring — after admitting he failed to file a Report of Foreign Bank and Financial Accounts (FBAR), concealing more than $1 million in Swiss bank accounts, U.S. Attorney Paul J. Fishman and Principal Deputy Assistant Attorney General John A. DiCicco of the Justice Department's Tax Division announced.
Harry Abrahamsen previously pleaded guilty before U.S. District Judge Dennis M. Cavanaugh to an information charging him with one count of willful failure to file an FBAR. Judge Cavanaugh also imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court, at his plea hearing, Abrahamsen admitted that he failed to file an FBAR for calendar year 2005.
Abrahamsen also failed to report his account at UBS AG in Switzerland on his individual income tax return for that year, and failed to report a second account opened in the name of Lucille Abrahamsen Jackson, his daughter. Additionally, Abrahamsen failed to report income deposited in and earned on the UBS bank accounts. The UBS accounts, originally opened in 1992, were transferred into the name of Primrose Properties S.A., a nominee Panamanian corporation, in 2000. Abrahamsen established Primrose in early 2000 with the assistance of a Swiss lawyer and Swiss banker, in order to hide these accounts from the Internal Revenue Service (IRS).
Abrahamsen also admitted that he funded the UBS accounts with approximately $1.3 million in false and inflated expenses paid by his pre-press printing business, SJT Imaging Inc., to a Swiss company. The inflated expenses were then deducted on SJT Imaging Inc.'s corporate tax returns, which allowed Abrahamsen to under report personal income for the years 1999, 2000, 2001, 2002 and 2003.
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The IRS is determined to make the prospect of FBAR convictions seem inevitable. But the truth is, there is a high standard of proof the IRS/DOJ has to meet in order to convince a jury in order to win a criminal conviction on someone's omission to file an FBAR.
Of course, being the subject such of a criminal indictment is such a horrible, painful position, even the threat is enough to convince people to come clean. Even an acquittal is not a victory; as the process is punishment.
If you have unfiled FBARs you're concerned about, contact us. We can help. Call us at 888-727-8796 or email info@irsmedic.com.
