The IRS is buckling down and putting the pressure on offshore tax evaders. As we touched on in late July, Bryan Williams, an Ex-Mobil Oil Corporation executive, has become the IRS’ latest victim.
Tax attorneys have had their eyes on this one particular case as a test of “how the courts will gauge the culpability of U.S. taxpayers who knew they needed to disclose their foreign accounts on special forms known as Foreign Bank and Financial Accounts reports, or FBARs, but intentionally did not.”
Williams allegedly hid foreign bank accounts holding more than $7 million from U.S. tax authorities. The Ex-Mobil executive lost the foreign accounts case when the Fourth Circuit Court of Appeals ruled in favor of the IRS and reversed the original decision which favored Williams. He was convicted of concealing money in two Swiss offshore bank accounts.
Shockingly, this isn’t the first time Williams has gotten in trouble with the IRS. In 2003, Williams pleaded guilty to separate criminal charges of fraud and conspiracy. He was sentenced to 46 months in prison and was ordered to pay back taxes with interest.
Now, given his 2003 admission and conviction, the appeals court judges wrote, “Williams cannot now claim that he was unaware of, inadvertently ignored or otherwise lacked the motivation to willfully disregard the FBAR reporting requirement.” This inevitably led the ruling’s reversal.
Still, despite the existence of the FBAR reporting requirement, the IRS has only recently begun to enforce it during a broad investigation of offshore tax evasion. Prosecutors suspect that tens of thousands of Americans have failed to file the FBARs, but the IRS is not taking the matter lightly and has indicted dozens of Americans in recent years.
Under Treasury Department rules, willful failure to file FBARs yields penalties of $100,000 per instance or 50 percent of the amount in the account for each year of violation. The latter penalty can leave a taxpayer owing more than what is in the actual account and all penalties are in addition to back taxes and interest owed.
If you have any questions and need help settling foreign account issues with the IRS, call 877-829-3535 and let US Tax Shield help you successfully catch up with foreign back tax issues.