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An inheritance in Swiss accounts triggers criminal charges

On Behalf of | Aug 5, 2016 | Tax Crimes

This was not solely a Swiss account inheritance. But it does raise issues for anyone who inherits a financial portfolio that includes international bank or investment accounts.

The U.S. attorney’s office reports that the taxpayer allegedly went through some great lengths to hide millions of dollars from a 2003 inheritance. Apparently, the taxpayer was listed as the executor and failed to disclose the full value of the inheritance on an estate tax return. Then approximately four million dollars was funneled into six undeclared bank account in Switzerland and France.

Charges filed were for obstruction of justice as well as filing false tax returns. An IRS Criminal Investigations Special Agent again confirmed that offshore bank accounts continue to be an area of agency focus.

Sham foundations conceal ownership

A Swiss financial advisory firm helped the taxpayer set up account using a sham entity. The foundation was set up in Lichtenstein under its formation laws. Later it was re-domiciled to Panama.

The taxpayer is accused of willfully failing to disclose the accounts from 2004 through 2009. The consultant that assisted with the set up of the accounts has been charged with helping clients in the U.S. evade taxes. He is still at large.

Lessons for any inheritance

What does this mean if you have inherited a foreign bank account? With any inheritance, you need to obtain competent tax advice. The estate and tax exemption is currently $5.45 million in 2016. Thus, you may not owe tax on an inheritance, but you may still need to file an estate tax return.

If any of the accounts are held in foreign banks, it may be important to investigate whether they have been properly declared. There are program that can bring you into compliance when a loved one never filed a Report of Foreign Bank and Financial Accounts (FBAR).

It also goes without saying that concealing a portion of an inheritance and investing it abroad can lead to issues down the road including criminal charges. Take care and speak with an experienced tax attorney whenever foreign bank accounts and investments are involved.


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