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Indictment for FBAR Charges, False Income Tax Returns and False Streamlined Submission (3/4/21)

Yesterday, DOJ Tax issued this press release:  Businessman Indicted for Not Reporting Foreign Bank Accounts and Filing False Documents with the IRS, here.  The press release announces charges for failure to report accounts on the FBARs for 2010 through 2016 and for false income tax returns for the same years “that did not report to the IRS all of his foreign bank accounts and income.”  The latter seems oddly worded since it does not state that the charge relates to failure to report the income from the accounts.  (I suppose it is possible that the income may have been properly reported and the Forms 8938 may have been false, but that seems odd.)

I think the most important item in the press release is the following:

Rahman is also charged with filing a false “Streamlined Submission” in conjunction with the IRS Streamlined Domestic Offshore Procedures. Those procedures allowed eligible taxpayers residing within the United States, who failed to report gross income from foreign financial accounts on prior tax returns, failed to pay taxes on that gross income, or who failed to submit an FBAR disclosing foreign financial accounts, to voluntarily disclose their conduct to the IRS and to pay a reduced penalty if their conduct was non-willful. The indictment alleges that Rahman’s Streamlined Submission did not truthfully disclose all the foreign bank accounts in which he had an interest, and falsely claimed that his failure to report all income, pay all tax, and submit all required information returns, such as FBARs, was non-willful.

In other words, Rahman omitted from the Streamlined Submission accounts he should have disclose and falsely certified his alleged nonwillfulness.  I just wonder whether, had he disclosed all accounts in the Streamlined Submission and certified nonwillfulness, the Government would have prosecuted for that certification alone.  I don’t know the answer to that, but the Government has asserted that it is prepared to charge false nonwillful certifications.

I previously reported on charges for false Streamlined Submissions in the following (reverse chronological order):

  • Recent Article on Prosecution for False Certification of Nonwillfulness (Federal Tax Crimes Blog 4/1/20), here.
  • Taxpayer Charged with False SFCP NonWillful Certification (Federal Tax Crimes Blog 8/26/19), here.
I did a Pacer search to find the indictment but the search returned the following information: Proceedings for case 1:21-cr-00022-LMB are not available.  The CourtListener docket entries for the case are here.  I created an alert in CourtListener, so when I should get an alert when the CL docket entries are refreshed.  I may then add something to this blog entry.

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