“Does this seem fair?” asks tax attorney Anthony E. Parent.
In Another FBAR Penalty Victory for IRS and DOJ, Mr. Parent writes of the “shocking” case where “the Department of Justice strong-armed an elderly widow into accepting a plea deal that included an FBAR penalty equal to 3200% of the total tax evaded.”
Mr. Parent gives information from DOJ:
Mary Estelle Curran of Palm Beach, Fla., pleaded guilty today in the U.S. District Court for the Southern District of Florida to filing false tax returns for tax years 2006 and 2007, the Justice Department and Internal Revenue Service, Criminal Investigation (IRS-CI) announced….According to the plea agreement, Curran’s conduct caused a tax loss to the government of approximately $667,716…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.
The 79 year old Florida woman inherited off-shore accounts from her husband. She did not report these and did evade taxes.
Mr. Parent says:
Absurd or not — here’s the thing —if she didn’t take the plea, if she lost at trial, her penalty could have been double. The FBAR penalty could be assessed per each year! Also, Ms. Curran could have evaded only $10,000 in taxes, and still be subjected to the same FBAR penalty of $21,666,929 because the account was value at $42,000,000.
Clearly, this is very different from the situation of most of us who simply have bank accounts, assets and investments where we live, work and, in many cases, where we are citizens. We can only hope someone in US will wake up to to the differences between the situations. Plus, we in Canada know CRA will not collect for IRS (and most of us don’t have $42 million sitting around in our banks accounts. If you do, I want to get to know you better!)
Yet, Mr. Parent gives another example of a Colorado man who “created a vast criminal conspiracy” to file false returns in the names of deceased individuals, but had a penalty of 19.25%
This article in Private Banker reports Mrs. Curran could face up to six years in prison in addition to the financial penalty she will pay. Plus:
According to Assistant Attorney General Kathryn Keneally, Curran was being made an example of.
I am not condoning what Ms. Curran did. She is a resident of the US and she evaded taxes through foreign accounts. That is and should be a criminal offense and she should pay a penalty for it. In fact, people like Mr. and Mrs. Curran may be the very reason why honest law-abiding people living outside US are facing the nightmare we are facing.
But, I will let you answer for yourself Mr. Parent’s question.
“Does this seem fair?”