Michael Reiss, New Jersey doctor, professor and medical researcher, was sentenced on January 11, 2012 for failing to report his offshore (UBS) bank accounts. According to the IRS, Reiss was sentenced to eight months in a community confinement center for failing to file Reports of Foreign Bank and Financial Accounts (FBAR) with the IRS. Reiss pleaded guilty in August 2011 and agreed to pay back taxes of at least $400,000 and to pay a civil penalty of over $1.2 million.
Dr. Reiss had opportunities but made no attempt to enter either the IRS Voluntary Disclosure Program (OVDP) that began in 2009, or the following program that recently closed in September 2011. These voluntary programs were designed for people like Reiss; U.S. taxpayers who may have undisclosed assets or income offshore. The program’s objectives were to bring taxpayers into compliance with the U.S. tax system, have them pay an IRS penalty, and by coming forward voluntarily, non-compliant taxpayers avoided the same criminal prosecution and stiff penalties facing Dr. Reiss.
It is always in taxpayer’s best interest to come forward from behind the shadows for IRS debt relief. Recent figures show the disclosure programs’ success thus far. The IRS has now collected an estimated:
- $2.7 billion in tax revenues as a result of the 2009 and 2011 Offshore Voluntary Disclosure Initiative.
- $2.2 billion has been collected by people who participated in the 2009 program, and the IRS is starting to work through the 2011 applications ($500 million in payments so far from the 2011 program).
For Reiss, purposely failing to report his accounts, made his IRS tax issues not only more complicated but also more expensive. According to the sentencing memos, Reiss was apparently aware of his obligation to file a Report of Foreign Bank Account (FBAR) as he had done so for other offshore accounts. However, he did not attempt FBAR filings for the Swiss accounts. This willful behavior exhibited by Reiss (and quite possibly his financial advisor) has him facing criminal charges that will no doubt have a major negative impact on his net worth. He will be responsible to pay the original income tax amount, plus severe penalties, interest for his failure to file and pay the taxes, as well as pay the 50% FBAR penalty. Being locked up for eight months will only exacerbate the financial devastation Dr. Reiss will most likely endure.
The latest IRS enforcement strategy proves, no one is safe from the wrath of the IRS. They are more determined than ever to go after wealthy individuals, both at home and overseas. If you still have undeclared funds in offshore bank accounts and owe back taxes, being proactive to disclose them to the IRS could help reduce your chances of criminal prosecution. You are encouraged to hire a certified tax resolution specialist or attorney to handle your case, to take over all IRS communications, bring you into FBAR compliance, minimize severe IRS penalties and work out a structured IRS payment plan that brings you out in the open and away from the shadows.
More Tax Help, IRS News and Tax Relief Tips:
- Treasury Proposes Multilateral Agreement for Offshore Compliance
- Swiss Bank Wegelin Avoids Court Appearance
- Offshore Tax Evaders Get Preferred IRS Help
- Swiss Pressured to Reveal All Offshore Accounts
- Swiss Bank Wegelin Indicted for U.S. Tax Evasion
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