We have written many posts about stepped up IRS efforts to catch offshore tax cheats. Back in January, we wrote a Tax Resolution University post about a Florida woman who was facing over $21 million dollars in IRS penalties and a possible six year prison sentence for not disclosing her worldwide assets. Today, we just read an article by Kay Bell of Don’t Mess with Taxes titled: “Beanie Babies billionaire caught in offshore tax evasion net“ that actually trumps them all.
Ty Warner, the Chicago-area entrepreneur and hotelier who made much of his billions off the Beanie Babies craze has pleaded guilty and agreed to pay an unbelievable $53.5 million dollar tax settlement (FBAR penalty) in connection with taxes owed on his offshore holdings. According to Bell, Warner’s case may in fact be among one of the largest penalties and perhaps the single biggest tax penalty ever assessed on undisclosed foreign accounts.
Here are some of the details in Warner’s case from the Department of Justice release:
- Warner allegedly set up a secret account at the Swiss bank, UBS in 1996.
- Warner went to great lengths to hide the $3.1 million in foreign income in the UBS account. He allegedly moved the money to another Swiss bank, where it was held under the name Molani Foundation to hide Warner’s ownership.
- Warner transferred the assets in his UBS account to a second Swiss financial institution, Zürcher Kantonalbank, when the account had a balance of approximately $93,630,08.
- Warner owed almost $1.3 million in income tax on the unreported income, but an amended 2002 return cut the unpaid tax bill to $885,300.
- Warner will now be paying over 60 times the $885,300 amended tax amount.
This case demonstrates once again that offshore tax collection is a government priority and that the government will continue its efforts to prosecute individual cases against Americans who have not disclosed income earned worldwide including Switzerland.
The only way to resolve offshore tax issues is to come clean with the IRS
If you have undisclosed offshore accounts and get tax relief now before the IRS contacts you. Taking a proactive, voluntary disclosure approach that includes hiring a qualified tax resolution specialist to make the required disclosures, file FBAR reports and amend your tax returns means you will pay back taxes and penalties but not be prosecuted.
However, you must act now to get more favorable treatment from the IRS and on a path toward permanent IRS tax relief.
Other resources:
Forbes: Beanie Babies Founder Ty Warner to Pay $53M For Offshore Tax Evasion http://www.forbes.com/sites/robertwood/2013/09/18/beanie-babies-founder-ty-warner-to-pay-53m-for-offshore-tax-evasion/
