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California couple pleads guilty in offshore bank account case

The federal government has an amnesty program still available for holders of offshore bank accounts. The deadline to come forward and voluntarily disclose secret offshore bank accounts in exchange for reduced penalties is August 31st. In addition, holders of offshore accounts can apply for an extension of ninety days if they are making good faith efforts at meeting the deadline but for some reason feel they may not be able to provide the details needed for the disclosure by August 31st.

The bad news for some holders of offshore accounts is that they are not eligible for the amnesty, because the government found them first. That was the case with a California couple who were found out when Swiss banking giant UBS made a deal with the U.S. government, which included turning over the names and account information of many Americans who held hidden accounts with UBS.

Orange County tax attorneys who have followed news reports about the couple noted that they diverted funds to their UBS account as well as additional offshore accounts, and failed to report the accounts to the Internal Revenue Service and the Treasury Department.

The couple runs a school for test pilots. Between 2004 and 2008, they sent more than a million dollars to their UBS account and fraudulently deducted the amounts of the transfers as interest payments on their corporate income tax returns. By this method, they also were able to more easily underreport their income on their individual tax returns.

The couple made a plea agreement in which they will pay more than $700,000 in restitution. They face up to three years in prison when they are sentenced in September.

Source: Bloomberg "California Couple Pleads Guilty to Hiding Swiss UBS Account" 6/20/2011

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