California Man Confesses to Hiding Foreign Bank Account From IRS

March 7, 2013 — In 2006, the IRS established a Whistleblower Office to reward tipsters who provide the IRS with tax fraud information that leads to the government’s recovery of unpaid taxes and penalties. The Tax Relief and Health Care Act of 2006 authorizes a reward for IRS informants that ranges from 15 to 30 percent.

Fighting offshore tax evasion is one of the top priorities for IRS investigators. United States citizens and residents who have a foreign bank account worth more than $10,000 must disclose the account on their individual income tax returns and file a report with the U.S. Treasury.

Hiding Assets in Foreign Bank Accounts Can Result in Huge IRS Penalties

A California man has pleaded guilty to the intentional failure to notify the Internal Revenue Service about a Swiss bank account he controlled, the Justice Department has announced. Christopher B. Berg of Portola Valley, California began working in 1999 as a consultant. The following year he met with Beda Singenberger, a UBS vice president of banking in San Francisco, about establishing a UBS bank account in Switzerland as a tax shelter for some of Berg’s consulting income. From 2001 to 2005, Berg had $642,069 in consulting compensation wire-transferred to a UBS account in Switzerland. Berg used that money to purchase a car, to pay his Eurocard bills, and to obtain cash when he was in Europe. Berg did not tell his certified public accountant about the Swiss account and he did not disclose the income deposited to the account or the income generated by the account.

The tax liability incurred in connection with the Swiss account is $270,757. At sentencing, Berg could receive as much as five years in prison along with a $250,000 fine.

Waters & Kraus: Representing Tax Fraud Whistleblowers

When IRS fraud involves an individual person, the Tax Relief and Health Care Act of 2006 allows whistleblower rewards only in cases where the offender’s gross income exceeds $200,000 for each taxable year involved and second, the IRS receives more than $2 million for tax, penalties and interest. But if a corporation engages in tax fraud, the statute permits rewards for government collaborators regardless of the amount recovered by the IRS.

When corporations are found to have defrauded the IRS, insider accounting personnel are frequently the ones to have blown the whistle. Informants in IRS tax fraud cases should learn their legal rights before approaching the government. Located in the firm’s offices in Texas, California and Maryland, the whistleblower lawyers with Waters & Kraus protect the interests of government collaborators. To find out more about our IRS tax fraud practice, email us or call our whistleblower attorneys at 800.226.9880.

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