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Restaurateurs brought up on tax fraud charges

We have made a point in recent months to highlight issues related to the U.S. government's deep focus on thwarting suspected tax evasion through the use of foreign accounts. Our efforts have attempted to provide some clarity about the conditions under which taxpayers must submit a Foreign Bank and Financial Account Report (FBAR) as part of their tax return filing practices. The purpose of those posts has been to help readers throughout the Washington, D.C, area avoid possible confrontations with the Internal Revenue Service.

Today, we want to reflect a little on the possible consequences that can surface if a person ends up being brought before a federal court on allegations of tax fraud, including purposeful failure to file an FBAR.

The case that brings this issue to the fore is out of California. It involves the owners of two restaurants in the city of Ukiah. It appears, based on the media report, that the man and woman are a couple, but it's hard to be sure.

According to the indictment, the two are alleged to have knowingly signed fraudulent income tax returns for the years from 2007 to 2011. In addition, the woman is claimed to have failed to provide FBAR forms in 2008 and 2009 for a savings account held in a bank in Thailand.

They were arraigned this past week on federal charges. If convicted, they could be facing significant prison time and possible fines. Conviction on each charge of filing a false tax return could result in a three-year prison term and a $250,000 fine. Each count of failing to submit an FBAR form could yield five years in prison and a $250,000 fine if a conviction is obtained.

Clearly anyone in such circumstances should be working closely with an experienced attorney to protect their rights and achieve the best possible outcome.

Source: Ukiah Daily Journal, "Ukiah restaurant owners charged with tax fraud," May 1, 2014

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