Long gone are the days of hiding money in offshore tax havens – the global recession has forced some European countries to clamor for tax revenue any way they can. A Reuters article titled: “Italian Designers Dolce and Gabbana Convicted of Tax Evasion” demonstrates just how vigorous the Italian government is going after fashion’s dynamic duo to collect unpaid taxes.
According to Reuters, just last week both Domenico Dolce and Stefano Gabbana were given a 20-month suspended prison sentence and required to pay restitution of $10 million euros or $13.4 million U.S dollars (USD) for hiding hundreds of millions of euros from Italian tax authorities. The judge in the case ruled that the designers sold their brand to the Luxembourg-based holding company Gado in 2004 to avoid declaring taxes on royalties of about 1 billion euros or about $1.3 billion USD.
The public prosecutor in the case, Gaetano Ruta, originally asked for a two-and-a-half year jail term for the high-profile case that began as an investigation in 2008 when authorities had started to crack down on tax evasion. The prosecutors allege Gado is just a shell company “that took no administrative or financial decisions” regarding D&G, and that those decisions were generated in Milan. The prosecutors insist that the designers were aware of the tax advantages they would receive from an alliance with Gado.
Both Dolce and Gabbana maintain their innocence. Their three lawyer defense team pledged to appeal the “stunning” verdict believing instead it will “be overturned on appeal.” The D&G design house risks a possible tax bill of more than 400 million euros or approximately $524 million USD as a result of the case.
This case illuminates how not only the U.S. Government but also global taxing authorities are going after wealthy tax cheats to collect back taxes for their struggling economies.
If you have undisclosed offshore bank accounts and assets, at this point voluntary disclosure is the only way to come clean with the IRS. Yes, you will have to pay IRS back taxes and IRS penalties but you will likely avoid criminal prosecution. Don’t mess around with the IRS; seek tax relief now! If you don’t, it’s only a matter of time before the IRS finds you and raises your non-compliance punishment even higher.
You will need to consult a Certified Tax Resolution Specialist with expertise handling offshore cases to let you know what your options are. This expert tax professional will take over all IRS communication, make the required disclosures, file FBAR reports and amend your tax returns generally for tax years 2003 through 2008. However, you must act now to get more favorable treatment from the IRS and permanent IRS tax relief for your tax compliance problem.
More Tax Help, IRS News and Tax Relief Tips:
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- Senate Confirms Keneally to Fight Tax Crime