tag:blogger.com,1999:blog-1519969502186924526.post369882266987168639..comments2023-10-24T08:00:53.865-05:00Comments on Federal Tax Crimes: Excessive Fines -- Forfeiture and FBAR Penalties (7/8/10)Jack Townsendhttp://www.blogger.com/profile/14469823736335455874noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-1519969502186924526.post-35635460851641407622012-03-14T15:29:25.564-05:002012-03-14T15:29:25.564-05:00That answer depends upon your unique facts. Consul...That answer depends upon your unique facts. Consult your attorney.<br /><br />Jack TownsendJack Townsendhttps://www.blogger.com/profile/14469823736335455874noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-68922001292224118812012-03-14T15:18:28.441-05:002012-03-14T15:18:28.441-05:00Hi Jack - Currently working with attorney but just...Hi Jack - Currently working with attorney but just found out about the amounts and blew me away. Would "Effective Tax Administration" or "Doubt as to Collectability with Special Circumstances" be probable next steps? Thank you.HolyCownoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-69148198382600135922012-03-13T19:37:15.701-05:002012-03-13T19:37:15.701-05:00Whoever is the person watching this person's l...Whoever is the person watching this person's legal affairs should discuss this with an attorney. Again, all of the relevant facts could not be presented, but projecting from the ones that are presented, I would think you may have a good opportunity to mitigate the damage. But you really need the individualized advice that can only come from a detailed review of the facts and circumstances by an attorney.<br /><br />Jack TownsendJack Townsendhttps://www.blogger.com/profile/14469823736335455874noreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-33667501305563563972012-03-13T19:00:53.518-05:002012-03-13T19:00:53.518-05:00Looking for insight into situation where very elde...Looking for insight into situation where very elderly US citizen with dementia and who lives in non-USA alzheimers facility accepted into 2012 OVDI. Individual had undeclared account for their overseas income (career job not drugs, etc) and capital gains (stock trading). Peak year balance was prior to stock market crash. Balance now 50% below peak balance. Individuals 6-figure FBAR penalty and taxes due (<$100K) will wipe out 100% of this individuals life savings. Can IRS/DOJ, via FBAR penalty/taxes, (literally) force this individual onto the street? What are options?HolyCownoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-3231757691090550052010-10-06T01:25:19.279-05:002010-10-06T01:25:19.279-05:00I know an immigrant who came to US for grad school...I know an immigrant who came to US for grad school, worked hard, and eventually graduated and got a good job in the US. Unfortunately, he kept a bank account in his former country. Some funds he earned when he worked as an undergrad, and some funds he got from his (foreign-living) parents, over $10,000, but nothing huge. For the first few years, he was a US non-resident alien (all F-1 students are exempt from residency for the first 5 years in the US), later he became a US resident. Nobody ever told him that he needs to file FBAR as soon as he becomes a US tax resident. When he became a resident, he was writing his doctoral thesis, living on $25k income per year. He has no US parents to tell him of FBAR, no friends in a similar situation, and no money or resources to hire tax consultants. He simply did his best filling out the resident tax form, amidst the research deadlines and exams in school, and missed the FBAR requirement. And, he actually even wired most of his money to US soon after becoming a resident -- but there was a short period when the foreign balance was above $10,000, and when he already was a US resident. And he did not report it because he simply did not know of the obligation. Now, this person is subject to severe, impossible, penalties. His life was turned upside down, he has become rather depressed and sometimes I see uncontrollable anger brewing in him. I am worried. He is thinking of leaving the country for good. Which would be a loss for US. One qualified, well-educated, smart engineer less. Likely several additional jobs will be lost as a result of him leaving. Why? Because he failed to pay approximately $50 in US taxes on the interests in his foreign account? Years of hard work wasted? If he leaves back home, what do you think he will tell the people of his country about America ? Does America even care? Is this justice, is this the compassionate, common-sense America that we tend to think we have?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-53323650037757696832010-07-23T21:24:10.929-05:002010-07-23T21:24:10.929-05:00The FBAR penalties make no sense. They should be ...The FBAR penalties make no sense. They should be related to taxes avoided, as the gross amounts have no relationship to the incomes. This will only drive people underground. Another example: there are many immigrants in the US who have accounts in their native countries, fully funded out of after-tax incomes, and even in situations where local taxes (as high as those in the US) are being paid in the native countries. All these people now stand criminalized. In many cases, the violations are just the result of ignorance. There is no way out for them to get in compliance given the penalties. In other words, no shortage of examples where it would make sense to let people get back in compliance for a reasonable cost, and allow them to pump the money back into the US economy rather than have it stay outside forever in hiding.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-56250783888272094222010-07-19T19:34:12.395-05:002010-07-19T19:34:12.395-05:00"But, the fear among practitioners is that th..."But, the fear among practitioners is that the IRS has a one size fits all, with no thought of nuance even when Excessive Fines concerns are present."<br /><br />Jack, it is not a fear. It is a fact. I see it in my day-to-day interaction with the Service.<br /><br />The VDP and its aftermath have created a set of perverse incentives. I'd make a www.longbets.org/ wager that in 5 years the voluntary compliance rate for US taxpayers will be lower than it is today, trending down towards European rates. I'd also guess that foreign banks will increasingly turn away U.S. customers, as they carry too much risk and overhead.<br /><br />/PhilPhil Hodgenhttp://hodgen.comnoreply@blogger.com