Non-Disclosure of Foreign Financial Accounts at Ever Increasing Risk of Criminal Tax Prosecution Especially Where Taxable Offshore Income Went Unreported

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Tax Law Offices of David W. Klasing, PC

Mar 09, 2021, 06:37 ET

IRVINE, Calif., March 9, 2021 /PRNewswire/ -- Defendants faced with criminal prosecution for non-disclosure of foreign financial accounts can face a lowered bar as to what constitutes willful criminal behavior. Simply put, individuals who face a willful or deliberate blindness instruction as part of their matter's jury instructions face an uphill battle when attempting to clear their name.

Generally, a jury must be convinced beyond a reasonable doubt that the defendant's willful blindness or other acts were to preserve ignorance of the law. Willful blindness, also known as the conscious avoidance doctrine in the Second Circuit, is a relaxed criminal standard that continues to change as the IRS and courts determine how willfulness can be defined. The conscious avoidance doctrine states that a defendant may not escape criminal liability by avoiding important facts that would make them guilty of committing a financial crime.

As the IRS has still not created a bright-line test for willful blindness, there could be many more changes to how a willful violation of tax law is adjudicated. Our firm cab ensure that you remain in compliance with ever-shifting tax & FBAR regulations.

The penalties for filing a late FBAR is one of the main reasons that you should fear a jury instruction for deliberate or willful blindness. The penalties assessed for a violation largely depend on the frequency of the violation and the amount of income that went unreported.

If a defendant is found guilty of "willful violation of transaction" because they did not report a foreign financial agency transaction, they could be fined the greater of $129,210 or 50% of the total amount of money within the foreign account. Note that these are just the civil penalties for an FBAR case.

If the IRS decides to refer an FBAR case to the Department of Justice, the taxpayer could be subject to criminal penalties and fines.

If you have failed to submit FBARs and report offshore taxable income the dually licensed Tax Lawyers and CPAs of The Tax Law Offices of David W. Klasing are ready willing and able to remove the risk or criminal prosecution if possible and provide damage control if it is not.

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Public Contact: Dave Klasing Esq. M.S.-Tax CPA, [email protected]

SOURCE Tax Law Offices of David W. Klasing, PC