The topics covered are:
A. Summons EnforcementJAT Comment: I was already aware of most of the case decisions reported, but most of the other case activity (such as cases started) was new to me. For example, among the recent FBAR collection suits filed is with respect to Ashvin Desai. I had previously reported on the criminal conviction of Ashvin Desai. See HSBC India Client Sentenced Ever So Lightly Given Facts and Trial Conviction Rather than Plea (7/12/14), here. The new DOJ Tax document describes the civil suit filing against Desai as follows (pp. 12-13):
B. John Doe Summonses
C. Foreign Account Tax Compliance Act.
C. Supreme Court Activity (Outline Level C appears twice)
D. Tax Shelter Litigation
1. STARS Shelters
2. DAD Shelters.
3. Son-of-BOSS Shelters
E. Offshore-Related Activities.
1. Summons Enforcement.
2. FBAR Issues
Recent collection cases filed:
F. APA Challenges to IRS or Department of Treasury Actions
G. Injunction Litigation
1. Return Preparers and Tax Shelter Promoters
2. Pyramiding Injunctions
H. Other Significant Matters
1. Affordable Care Act-Related Cases.
2. Railroad Retirement Act
3. Bankruptcy Issues.
4. § 1603 of the American Recovery and Reinvestment Tax Act.
United States v. Ashvin Desai (N.D. Cal.) – On June 20, 2016, we filed suit seeking a judgment against Ashvin Desai for his willful failure to file Reports of Foreign Bank and Financial Accounts (FBARs) for 2007, 2008, and 2009. During those years Desai had a financial interest in, and signatory or other authority over four accounts maintained at Hong Kong and Shanghai Banking Corporation Limited (HSBC) India. Millions of dollars flowed into these accounts. Desai failed to file FBARs for the accounts, did not report the income earned in the accounts on this Form 1040 returns for 2007-2009, and indicated on Schedule B of those returns that he did not have an interest in or signatory or other authority over a financial account in a foreign country. The IRS assessed more than $14 million in penalties under 31 U.S.C. § 5321 against Desai for willfully failing to file the FBARs. With accruals, Desai’s total debt exceeds $16 million. In October 2013, a jury found Desai guilty of three counts of failing to file an FBAR for 2007 through 2009. It also found him guilty of three counts of attempting to evade or defeat tax in violation of I.R.C. § 7201 and two counts of aiding in the preparation of false tax returns for his two adult children in violation of I.R.C.§ 7206(2).Many other previously unknown FBAR collection actions are reported, as well.
One other comment: The report (p. 17) identifies a case filing on March 18, 2016 as follows: United States v. Shoaleh Yermian (C.D. Cal.) for an FBAR penalty amount of $32,142.79. I was surprised by the low amount for which DOJ Tax will spend significant resources to pursue (including further collection activity if judgment is given).