Aother UBS-Related FBAR Conviction!

According to Anthony Parent -- The US Department of Justice (DOJ) scored yet another victory in its crusade against Offshore tax evasion. Christopher B. Berg of Portola Valley, Calif. plead guilty in U.S. District Court in San Jose, California of one count of willful failure to file, in 2005, the required report of foreign bank account (FBAR) for a bank account he opened with UBS in Switzerland.  

According to the information, in 1999, Berg began working as a consultant. In 2000, Berg met with Beda Singenberger, a Swiss financial consultant, and a vice president of banking at UBS in San Francisco regarding setting up a bank account at UBS in Switzerland to shelter a portion of his consulting income from taxation.

 
Beginning in 2001 and continuing through 2005, funds representing $642,069 in compensation earned by Berg from consulting services were deposited by wire transfer to UBS accounts.
 
Berg used the money in these accounts at UBS in Switzerland to purchase a vehicle, to obtain cash while in Europe, and to pay the balance on a Eurocard he used while traveling in Europe.
 
Berg did not disclose the existence of his accounts at UBS in Switzerland to his certified public accountant, and did not disclose the income earned by these accounts or the consulting income deposited to the accounts.
 
If restitution is ordered, and Mr. Berg can’t pay, he will likely have a parallel civil tax assessment and an ugly tax problem. In order to settle the civil tax assessment with an Offer in Compromise, he must first pay the criminal restitution amount.
 
The other hurdle is that the IRS does not like to settle back taxes if they feel someone is dishonest or not worthy of consideration. It is very difficult to settle back taxes due to tax evasion.
 
Lastly, even discharging tax debts in bankruptcy (after waiting the appropriate time) is difficult as well, as the Chapter 7 bankruptcy code states that any tax arises from a willful attempt to evade or defeat tax is non-dischargeable. So the best hope in cases where a defendant is given an order of restitution and civil assessment that he can’t afford to to pay is, on the civil side, to get into a Partial Payment Installment Agreement, or Currently Non-Collectable status, wait out the IRS civil statute of limitations and then seek to modify the criminal restitution (which has no statute of limitations) in criminal court.
 

 

To those considering using the IRS Offshore Voluntary Disclosure Program - criminal cases are very difficult to recover from financially.
 
It is nothing like settling back taxes from such calamities as divorce, unemployment, or health problems. Criminal tax problems are usually fairly catastrophic — even without jail time.

Secret Foreign Investments Keeping You Awake at Night?

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