Accountant Forgets to Report Swiss Accounts

The Department of Justice today released a statement about UBS client, Steven Michael Rubinstein, a chartered accountant living in Boca Raton, Fla., who pleaded guilty to filing a false tax return for tax year 2004. Rubinstein was charged with filing a false tax return that intentionally failed to disclose the existence of a Swiss bank account maintained by UBS of which he was the beneficial owner and failed to report any income earned on that account.

“Combating offshore tax evasion by wealthy taxpayers continues to be one of the IRS’ top priorities,” said IRS Commissioner Doug Shulman. “The IRS is committed to vigorously pursuing those who illegally hide their money offshore as well as the financial institutions which help them.”

According to court documents and statements made during the court hearing, Rubinstein maintained a UBS bank account in the name of Hybridge International Ltd., a nominee British Virgin Island corporation. From 2001 through 2008, Rubinstein communicated with bankers at UBS via email, telephone and in person about the purchase and sale of securities worth more than 4.5 million Swiss Francs, the conversion of investments from U.S. dollars to British Pounds, the deposit and transfer of funds into and out of the UBS Swiss accounts, and the repatriation of approximately $7 million into the United States to purchase property and build his personal residence in Boca Raton. Additionally, Rubinstein deposited and sold more than $2 million in South African Krugerrands through his UBS accounts.

Tax free.

According to court records, on or about April 15, 2005, Rubinstein, who works for an international company that assists clients to build, buy and sell yachts, filed a tax return for 2004 that failed to report that he had an interest in, or signature authority over, a financial account at UBS in Switzerland. Additionally, Rubinstein failed to report the income he earned on any UBS Swiss bank accounts.

Additionally, Rubinstein acknowledged that he was required to file Reports of Foreign Bank and Financial Accounts (FBARs) disclosing his UBS bank account for years 2001 through 2007. FBARs must be filed with the U.S. Treasury on or before June 30 of the succeeding year. However, he admitted that he intentionally failed to file FBARs each year. As part of his plea agreement, Rubinstein agreed to pay a fifty percent penalty for the year with the highest balance in the account as of June 30 in order to resolve his civil liability for failing to file FBARs for tax years 2001 through 2007.

“As the FBAR filing deadline of June 30 rapidly approaches, taxpayers should be aware of the serious consequences of failing to report offshore income and foreign bank accounts,” said Acting Assistant Attorney General John A. DiCicco. “Taxpayers who hide income offshore and fail to comply with the FBAR filing deadline face criminal prosecution, jail time, and steep fines.”

Got offshore accounts? They will find you!

Image Credit: borman818, Flickr