Recently I met a gentlemen while traveling on a plane. After the usual pleasantries, he discovered that I was a lawyer that helped taxpayers with FBAR and unreported offshore account issues. The gentleman proudly announced that his account located in a tiny Caribbean island nation was “safe” from disclosure and that a “friend” high in the finance ministry told him “not to worry.” Despite my best efforts to change his mind, my seat mate remained unconvinced.
Unfortunately, that attitude is common. While there are tens of thousands of people with unreported accounts, most folks in that category are dual nationals or foreign born Americans. Those folks simply don’t understand their FBAR filing responsibilities. There is a hard core group, however, who fully understand their responsibilities and simply think they won’t get caught.
Case in point, Carlos Menem, former President of Argentina. Several years ago he was convicted of arms trafficking (while in office). New information reveals that while his charges were pending – and for many years – Menem had unreported foreign accounts. Like the U.S., Argentinian law requires taxpayers to report foreign bank accounts. And like the U.S., failure to report a foreign account is a crime.
Why didn’t Menem come into compliance, especially while under indictment? We don’t know for sure but suspect it is simply because he didn’t think he would be caught. Menem allegedly had his accounts in Switzerland and Liechtenstein, two notorious tax havens. According to the Swiss Broadcasting Corporation, Switzerland agreed last week to turn over records to Argentina prosecutors.
If the former president of Argentina isn’t safe in his own country, how safe are you? (Although previously convicted of arms trafficking, Menem is now a member of the Argentine Senate. He now faces new charges relating to the alleged foreign accounts.)
U.S. taxpayers with foreign financial holdings totaling more than $10,000 must annual report those assets on a Report of Foreign Bank and Financial Accounts or FBAR form. These assets must also be disclosed on Schedule B of one’s individual income tax return and sometimes on Form 8938, the so-called FATCA form.
Failure to file an FBAR can be a felony and also result in huge civil penalties of $100,000 or more per year.
Financial transparency is the new normal. Bank secrecy is virtually dead. Some people may fool Uncle Sam and some may get lucky but the odds are against you and the penalties simply too great to take the risk.
If you haven’t file an FBAR for one or more years, contact an experienced tax attorney immediately. The IRS has an amnesty program and other options that could lower or even eliminate any penalties.Most options disappear, however, if the IRS finds your foreign account first.
If you need more information about FBAR reporting issues, we offer free consultations. All inquiries are protected by the attorney – client privilege too. For more information, contact attorney Bethany Kroes at 414-223-0464 or by email at You may also contact the author at (414) 704-6731 or by email at
Post by Brian Mahany, Esq.