On Aug. 19, a Florida man admitted his guilt in a tax conspiracy scheme to hide at least $1.1 million from the Internal Revenue Service in secret overseas accounts for over 25 years. The 83-year-old Delray Beach, Florida, resident pleaded guilty in a Manhattan courtroom to his role in secreting money in bank accounts he held in Switzerland and Israel.
As part of the plea agreement, the defendant accepted a fine of $588,042 and agreed to help prosecutors in an effort to avoid further penalties. Despite his plea, the defendant still faces up to eight years in federal prison, which will be determined at his sentencing hearing on Feb. 6.
The Florida defendant is just one of dozens of wealthy Americans pursued by the U.S. Department of Justice and the Internal Revenue Service in a multi-year effort to suppress offshore tax evasion. Just five years ago, the Switzerland-based bank UBS agreed to cooperate with authorities in identifying Americans holding secret accounts in its bank in exchange for a $780 million deal in which the government agreed to defer prosecution against the bank.
United States citizens are required by law to disclose whether they have foreign or domestic income. They are also required to report any foreign accounts in excess of $10,000 per calendar year.
Tax evasion is the general term used to refer to the practice of hiding money from the IRS to escape having to pay taxes on that money. Tax evasion can take many forms such as a willful failure to file taxes, lying about your income or asking others such as accountants to lie about money on your behalf.
Florida residents facing tax evasion charges should know that each defendant has a right to challenge the evidence and testimony offered against them. In some cases, it may be possible to cast doubt on the government's charges. For example, a mistake made by your accountant or other financial institutions may not necessarily constitute tax avoidance or failure to pay taxes.
Additionally, sometimes it is possible to reach a plea bargain agreement with the government. In those instances, it may be possible to receive a reduction in fines and imprisonment. Although each case is different, it may be in your best interest to have your attorney attempt to negotiate a plea settlement on your behalf.
Source: USA Today, "Florida man, 83, admits hiding $1.1M from IRS" Kevin McCoy, Aug. 20, 2014