Tax Litigation Law Office of Scott Kauffman
(949) 474-1820

Hackney Literary Award
Mighty River Short Story Contest Winner

Offshore accounts: the case of the 5-second probation

Criminal penalties - for tax evasion or anything else - are typically measured in monetary fines and prison sentence lengths. For conviction on a serious charge, the sentence is often to a term of many years in prison.

Last week, however, a federal judge in Florida may have set a record for shortest sentence ever imposed after a criminal conviction. The case concerned a 79-year-old widow who pleaded guilty to failing to disclose information about a foreign bank account she had inherited from her husband. The judge sentenced her to probation - but it lasted only a few seconds before the judge immediately issued a follow-up order ending the probation.

Taxpayers in California and across the country have struggled to keep up with the federal government's stepped-up scrutiny of foreign accounts. The IRS and other agencies have been aggressively going after what they perceive to be tax evasion by Americans who hold such accounts. But last week's case of the five-second probation shows that these aggressive efforts sometimes amount to overreaching.

The federal judge who handled the case did only impose a remarkably short probation. He also rebuked federal prosecutors to pursuing the case and urged them to seek a presidential pardon for the woman. Relying on financial advisors, the woman had contacted the IRS after her husband's death about foreign accounts,

One of these accounts was at the mammoth Swiss firm UBS. Prosecutors targeted her as a test case of a taxpayer who failed to comply with offshore account laws. But the evidence showed that the woman acted in good faith - and that the U.S. Justice Department does not always get it right when it seeks criminal sanctions against taxpayers.

Please visit our page on offshore accounts.

Source: "Offshore account holders win a victory in government tax case," CNN Money, Lynnley Browning, 4-29-13

No Comments

Leave a comment
Comment Information