A Palm Beach, Fla., woman has pleaded guilty to failing to disclose income from money that she and her late husband held in a Swiss bank account at UBS and later transferred to Liechtenstein, and she has agreed to pay a $21 million penalty.
Mary Estelle Curran pleaded guilty Tuesday in the U.S. District Court for the Southern District of Florida to filing false tax returns for tax years 2006 and 2007, according to the Justice Department and the Internal Revenue Service’s Criminal Investigation division.
Curran, a U.S. citizen, maintained undeclared bank accounts at UBS AG in Switzerland and a bank in Liechtenstein, which she inherited from her husband in 2000, according to court documents. The accounts at UBS were held in the names of nominee foreign entities, including the Flognet Foundation and Norega Investment. The account earned income each year, which Curran failed to report on her 2001 through 2007 individual income tax returns.
Curran admitted in her plea agreement that her conduct caused a tax loss to the government of approximately $667,716. The value of all the undeclared foreign financial accounts owned or controlled by Curran exceeded $42 million in 2007, according to prosecutors. In order to resolve her civil liability for failure to report her foreign bank accounts, Curran has agreed to pay a civil penalty in the amount of 50 percent of the high balance of the accounts, which is $21,666,929.
“Offshore accounts can no longer be used to hide from the IRS and avoid paying the fair amount of tax,” said IRS Criminal Investigation Chief Richard Weber in a statement. “IRS Criminal Investigation is aggressively pursuing tax cheats – both domestically and internationally. We owe it to every American taxpayer to use all lawful means to identify and prosecute both those who evade their taxes and those who assist them in evading their tax obligations.”
Curran faces up to six years in prison. A sentencing date has not been set.
3 Comments
@jerrydixon
I forgot this one detail. Maximum penalty for Willful failure to file FBAR report is 50% of the account value. It actually could be more than that, as it could be a yearly charge per account and include other penalties, but in practice, the DOJ/IRS, in its discretionary generosity, only asks for one! That is severe enough!
Here is reference table from the IRM http://1.usa.gov/13vYLu7
Posted by: Just Me | January 14, 2013 1:04 PM
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@jerrydixon...
No, when it comes to FBAR penalties, the penalty is TOTALLY divorced from the tax loss. The IRS has been on an offshore jihad since 2008, and frankly they have been bludgeoning people with FBAR failures, a little known form from the 1970 Secrecy Act, that they pulled off the shelf, shook off the dust, and suddenly decided to use it as a "revenue raiser" in their offshore crusade.
This impacts not just widows, but millions of Americans Abroad. Under the leadership of ex-Commissioner Shulman, who let identity theft and child tax credit fraud flames range out of control in the homeland, he went abroad looking for giants to slay instead. Looks like the got one!
In the meantime, a lot of damage has been done to midgets abroad. Even the National Tax Advocate, in the 2012 Report to Congress that they don't read pointed it out:
in MSP 8 " The IRS's Offshore Voluntary Disclosure Programs Discourage Voluntary Compliance http://1.usa.gov/VRJVsc
and the difficulties for Americans abroad who have even more tax complexity and penalty risk than Homelanders was pointed out:
in MSP 15 Challenges Persist for International Taxpayers http://1.usa.gov/TLFb9l
But the media just glaze over these issues and move on. A headline about a Widow in Florida paying $21 million in penalties, is more fun to report on.
Posted by: Just Me | January 14, 2013 12:51 PM
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I thought penalties were based on the amount of underpaid tax, not a percentage of how much money you have. Where is this coming from?
Posted by: jerrydixon | January 14, 2013 12:21 PM
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