by Brian Mahany
An 83 year old Massachusetts man may be headed to a federal prison for failing to report an offshore Swiss bank account. According to published reports, Jacques Wajsfelner pleaded guilty to a felony charge related to unreported accounts at Credit Suisse and Wegelin & Co., both prominent Swiss banks. (A check of court records in Manhattan yesterday show that Wajsfelner was charged with a single count of failing to report a foreign bank account, a felony punishable by 5 years in prison. The reported conviction was not yet available.)
According to the criminal information filed by the United States Attorney’s Office, Wajfelner had help in setting up his foreign account from a CPA named Beda Singenberger. Last year the feds indicted Singenberger and charged him with helping dozens of US taxpayers open secret foreign accounts. In what has become a common practice, the IRS frequently charges individuals involved in setting up the accounts such as lawyers, accountants and foreign bankers in the hopes they will turn in their clients in return for a lenient sentence.
Such arrangements give these informants reason to lie or at least stretch the truth. The more their information is used to put away American account holders, the less jail for the informant.
No matter how well concealed a foreign account may be, someone knows the identity of the beneficial owner. The IRS has been getting better at tracking wire transfer and foreign credit and debit card use as well. It may take the IRS quite some time to find well hidden foreign accounts but chances are they will.
Opening a foreign account is legal. The IRS requires that tax must be paid on any income generated from the account (interest or dividends) just as if the account were at the corner bank. The law also requires most account holders to annually complete a Report of Foreign Bank and Financial Accounts or “FBAR” form.
The felony isn’t for having the account, it is the failure to report the account. Luckily, there is an amnesty program (2012 Offshore Voluntary Disclosure Program, sometimes called “OVDI” or “OVDP”) that can help intentional violators avoid prison. The catch, however, is one year of reduced penalties and you must file for amnesty before the IRS finds you.
The tax lawyers at Mahany & Ertl have helped many taxpayers with a wide variety of offshore and foreign reporting requirements. We can assist with FBAR filings, the new FATCA law, the offshore tax amnesty and traditional disclosures too. We have also assisted those already under criminal investigation or under indictment. If you are under audit or criminal investigation, do not delay another day.
For more information, contact attorney Bethany Kroes at or by telephone at (414) 223-0464. Think you may already have a criminal investigation underway? Contact the author, attorney Brian Mahany at or by phone at (414) 704-6731. All inquiries are protected by the attorney client privilege and kept in strict confidence – – even if you do not ultimately hire us.
Mahany & Ertl – America’s Tax Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine; Minneapolis, Minnesota & coming soon, San Francisco, California (tax only).