by Brian Mahany
We are still scratching our heads over this story. A Swiss financial planner / CPA “accidentally” mailed his client list. Now the list is in the hands of Uncle Sam. According to published reports, 3 of his clients have already been charged by federal prosecutors for having unreported foreign accounts. Sooner or later, everyone sends an email to the wrong party. In this case, Swiss financial adviser Beda Singenberger accidentally mailed the entire list through the postal service mail!
Singenberger’s client list is rumored to have the names of dozens of Americans with unreported accounts. As noted above, the list has already resulted in 3 of those folks being charged criminally. That means there are many more nervous people out there just waiting for the fateful knock on the door.
As we reported last week, the IRS has begun rejecting applications for the Offshore Voluntary Disclosure Program (tax amnesty) if the taxpayer’s name is already known to the IRS. It’s fairly safe to say that the identity of the remaining clients is already known.
Americans with unreported foreign financial accounts (that means more than just bank accounts) must report those accounts every year on a Report of Foreign Bank and Financial Accounts, also known as an FBAR or TD 90-22.1 form. Failure to file an FBAR could be a felony if the violation is willful. Violations also carry huge civil fines.
Was Singenberger’s inadvertent mailing error the reason several clients have been caught? “Yes”, says Assistant United States Attorney Dan Levy. He also confirmed that “People who hide money in Switzerland are extraordinarily difficult for law enforcement to identify.”
It’s not just Singenberger’s client who are in trouble. Singenberger was indicted in July 2011 but has yet to be arrested. According to court records he is a certified public accountant and owner of Sinco Treuhand AG in Switzerland. Much of the 41 page indictment remains redacted and under seal but from we can glean, the feds say Singenberger conspired with his clients to defraud the IRS and evade taxes.They say to further conceal the identity of the taxpayers, Singenberger helped them open accounts in sham or nominee form using Liechtenstein and Hong Kong foundations and trusts. He also assisted them in filing false declarations with the IRS.
Conspiracy charges are serious felonies. Once arrested, Singenberger faces decades in prison. He apparently has not been caught yet as Switzerland generally does not extradite for criminal tax charges. Should he leave Switzerland, however, he is likely to be arrested immediately.
According to the indictment, one of the companies Singenberger helped set up for a client was called “Lucky Overseas Ventures LTD.” We suspect the American owning that account is not feeling so lucky today.
Is there a lesson here? Absolutely! One never know how and when they will be caught. Even an inadvertent email could sink dozens of people and ruin families.
If you have an unreported foreign account, its only a matter of time before you are caught. The feds have become very adept at sleuthing the identities of Americans with unreported accounts – John Doe subpoenas, indictments of bankers, wire transfer records, IRS whistleblower reports (yes, ex lovers can receive a cash award for turning you in) and of course, the looming FATCA deadline. As we have previously reported, Switzerland signed an intergovernmental agreement with the IRS earlier this year.
There is an amnesty program for folks with unreported accounts. It is called the Offshore Voluntary Disclosure Program and its a great deal for people who intentionally didn’t report their offshore accounts. Other options exist for those with small accounts, who inherited accounts or who simply didn’t know about the FBAR requirements.
Whatever you do, act quickly. The IRS operates on a first contact policy meaning that you must get to them before they find you. Once they have your name – even if they have contacted you yet – it may be too late to seek amnesty. (See our article from last week, IRS Begins Rejecting OVDI Applications – Important News For Fence Sitters.)
With the number of options decreasing and looming compliance deadlines, anyone with an unreported account should consult with an experienced tax attorney immediately. The tax lawyers at Mahany & Ertl specialize in offshore reporting issues. For more information, contact attorney Bethany Kroes at or by telephone at (414) 223-0464. All inquiries are protected by the attorney – client privilege and kept in strict confidence.
Mahany & Ertl – America’s Tax Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine; Minneapolis, Minnesota and San Francisco, California. IRS tax services available worldwide.
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