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United States taxpayers who hold an ownership interest in or signature authority over a foreign financial account with an aggregate balance of at least $10,000 at any point during the year must file a Report of Foreign Bank and Financial Accounts (“FBAR”) by June 30. Although taxpayers are required to file the FBAR form electronically, the information may be completed online or uploaded to the Financial Crimes Enforcement Network’s website using a recently released form.

In Smith v. Commissioner of Internal Revenue, the Internal Revenue Service issued a notice to a man advising him that it planned to issue proposed trust-fund recovery penalties against him for unremitted payroll taxes collected in 2009 by a company the man previously held a partnership interest in. The Internal Revenue Code requires employers in the United States to withhold Social Security, Medicare, and other taxes from an employee’s paycheck.

In 2009, Swiss banking institution UBS agreed to pay the United States government about $780 million for its role in helping American citizens hide assets overseas in order to avoid paying U.S. federal income taxes. The case also resulted in the voluntary disclosure of previously unreported offshore assets by thousands of U.S. citizens.

The Internal Revenue Service is tasked with enforcing the portion of the Bank Secrecy Act of 1970 that requires American taxpayers to disclose their foreign financial assets and accounts.  As a result, United States taxpayers who own or hold signature authority over an offshore bank account with an aggregate balance of at least $10,000 must file the Report of Foreign Bank and Financial Accounts (“FBAR”) by June 30 of each year. If an individual fails to do so, significant civil penalties may result.

Currently, about seven million United States citizens live overseas.  Since the nation’s tax laws apply to taxpayers regardless of where their income was earned, Americans who live abroad are still required to submit annual tax returns to the Internal Revenue Service.  Although the tax code presently provides for an exclusion of the first $100,800 of an expat’s offshore income, this exclusion is not automatic.  Instead, it must be claimed on an individual’s federal income tax return.

A tax preparer was recently sentenced to serve time behind bars in connection with a number of fraudulent tax returns she apparently filed in 2008 on behalf of herself and a number of other individuals. The 32-year-old woman was reportedly indicted by a grand jury on five counts of refund fraud and one count of making a false federal tax return.

A United States Senate bill that would have repealed the Foreign Account Tax Compliance Act (“FATCA”) recently failed to reach a vote. The 2010 law was reportedly created in an effort to combat tax evasion by requiring foreign banks to disclose financial accounts with assets totaling at least $50,000 that are held by U.S. taxpayers.

A 66-year-old Falmouth, Maine man was recently convicted of eight counts of tax evasion following a jury trial. According to prosecutors, the former poker-chip manufacturing company president paid numerous employees under the table in order to avoid remitting payroll taxes to the appropriate governmental entities.

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