Residents of Massachusetts may be interested in a tax evasion case involving the creator of Beanie Babies. The billionaire developer of the massively popular plush toys recently pleaded guilty to charges of tax evasion. After failing to report earnings from an offshore bank account to the Internal Revenue Service, he will now have to pay a fine of $53 million and could face up to five years in prison.
With an estimated net worth of $2.6 billion, the man is included in the Forbes list of the 400 wealthiest Americans. According to court documents, he began keeping much of his wealth in a Swiss bank account in 1996. In 2002, investments he had made with the bank allegedly yielded $3.1 million in gross income that was unreported. Prosecutors alleged that he failed to inform his accountants about the existence of that income.
The defendant’s attorney has stated that his client plans to pay the $53 million penalty and accepts full responsibility for his actions. He also went on to explain that his client had been attempting to resolve the situation for several years. His client still faces the possibility of a sentence of up to five years in prison.
Tax avoidance is not illegal, and is not the same as tax evasion. An attorney with experience in income tax matters may be able to provide advice and counsel to clients who have been targeted by the Internal Revenue Service. If criminal charges end up being filed, such an attorney may be able to help clients prepare a defense and negotiate a fair and acceptable settlement.
Source: Boston.com, “Beanie Babies creator charged with tax evasion”, Michael Tarm, September 18, 2013